905R87112
5572

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                               WASHINGTON,  D C.  20460
       7 SEP                                               OFFICE OF WATER AND
                                                            WASTE MANAGEMENT
     FROM:  THOMAS C. JORLING, ASSISTANT ADMINISTRATOR


     PROPOSED WATER QUALITY MANAGEMENT REGULATIONS
     /
     X

          The proposed regulations cover the Water  Quality Management Program
     as authorized by Sections 106, 208, and 303(e)  of the Clean Water Act.
     Requirements which now appear in four separate parts of the Code of
     Federal Regulation (40 CFR 130, 131,  and various grant sections in
     Part 35) are consolidated in this proposal.

          The Environmental Protection Agency values the views and suggestions
     of members of the public regarding these important regulations.  I urge you
     to read the attached document carefully and  provide us with your reactions,
     comments and recommendations for changes.  As  indicated in the introduction
     to the proposed regulations, comments may  be submitted to the Agency for
     60 days.  Written comments should be addressed to Lin Eichmiller,
     Environmental Protection Agency, WH/554, 401 M Street, S.W., Washington,
     D.C.  20460.  A public hearing on the regulations will be held in
     Washington, D.C. on October 24, 1978.  I encourage your participation
     in the hearing.

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                 ENVIRONMENTAL PROTECTION AGENCY

                         (40 CFR PART 35)

               GRANTS AND OTHER FEDERAL ASSISTANCE



AGENCY:  Environmental Protection Agency.

ACTION:  Proposed Rule.

SUMMARY:  This proposed regulation is intended to carry out amendments
to section 208 of the Federal Water Pollution Control Act contained in
the Clean Water Act of 1977  (P.L. 95-217), and to consolidate and revise
regulations implementing sections 106, 208, and 303(e) of the Act set
forth in Parts 130 and 131, and portions of Part 35 of this chapter.

DATES:  Comments must be received on or before [60 days from date of
publication].

PUBLIC HEARING:  October 24, 1978 from 1:30 p.m. to 5:30 p.m.; 7:30 p.m. to
10:30 p.m.

ADDRESSES:  Public Hearing:  Interdepartmental Auditorium, Constitution
Avenue, M.W. (between 12th and 14th Streets), Washington, D. C.

Send requests to speak to:  Patti Morris, Environmental Protection Agency
(WH-554), 401 M Street, S.W., Washington, D. C. 20460.  (For additional
information regarding requests to speak and the agenda for the hearing see
Public Hearing below).

Send written comments to:  Lin Eichmiller, Environmental Protection Agency
(WH-554), 401 M Street, S.W., Washington, D. C. 20460.  Comments submitted
may be inspected at the Public Information Reference Unit, EPA Headquarters,
Room 2922, Waterside Mall, 401 M Street, S.W., Washington, D. C. 20460.

FOR FURTHER INFORMATION CONTACT:  Lin Eichmiller, Environmental Protection
Agency (WH-554), 401 M Street, S.W., Washington, D. C. 20460, 202 (755-6965).

                         Public Hearing

     A hearing to receive comments on the proposed regulation will be
held at the Interdepartmental Auditorium, Constitution Avenue, N.W. (between
12th and 14th Streets), Washington, D. C., from 1:30 p.m. to 5:30 p.m. and
7:30 p.m. to 10:30 p.m., on October 24, 1978.

     Individuals wishing to comment at the hearing are requested to submit
their names, addresses, and telephone numbers to Patti Morris, Environmental
Protection Agency (WH-554), 401 M Street, S.W., Washington, D. C. 20460.

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Requests should indicate the length of time each individual wishes to
comment and any preference to time.  Statements will be limited to a
maximum of 10 minutes.  Individuals who request to comment will be notified
in advance of the time scheduled for their statement.  Time will be reserved
for unscheduled comments.  Each individual who plans to comment is requested
to submit one legible copy of his or her statement at the hearing.  The
hearing record will be closed at the end of the hearing; however, as
indicated above, written comments on the proposed regulations will be
accepted by EPA if they are received no later than [60 days from date of
publication].  The agenda for the hearing is as follows:  Afternoon
Session:  Introductory Presentation -- 1:30 - 1:50; Question and Answer
Session -- 1:50 - 2:10; Scheduled Presentations — 2:10 - 4:45; Unscheduled
Testimony — 4:45 - 5:30; Recess — 5:30.  Evening Session:  If there is
adequate public interest, an evening session will be scheduled.  The
afternoon agenda would be followed.

SUPPLEMENTARY INFORMATION:

This proposed regulation governs the water quality management (WQM) program
authorized by sections 106, 208, and 303(e) of the Clean Water Act of
1977.  Until this consolidation, program requirements were set forth in
four places in Title 40:  Part 130; Part 131; §35.200 through §35.236;
and §35.551 through §35.570.  This revision responds to the President's
initiative on consolidation of Federal requirements for State and local
planning and the President's urban policy, and does not represent a change
in basic program goals or objectives.

There are, however, significant changes in the way EPA will manage this
program in the future, and the new regulation reflects those changes.  EPA has
assessed the need to modify the management of the program through a study
required by the Office of Management and Budget entitled "Program Strategy
for Water Quality Management, FY 1979-1983".  This strategy identified
the following areas which the regulation addresses:

1)  The need for a more defined role for the States with more specific
delineation of the partnership between the States, areawide agencies, and EPA;

2)  The need for specific outputs to be identified in the grant agreement based
on national/State/areawide priorities and for these outputs to be tied to
funding;

3)  The need, in order to promote implementation, to establish a policy that
beginning in fiscal year 1980, no planning funds be awarded to an agency
unless at least a significant portion of its plan is being implemented;

4)  The need to ensure greater integration and consolidation of water quality
management environmental programs through State/EPA Agreements, thereby
developing the most cost-effective and environmentally sound decisions;
and

5)  The need to focus attention on the difficult decisions that are required,
through a greater use by EPA of incentives, sanctions, and technical assistance.


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The proposed regulation also makes other adjustments in the structure of
the water quality management program.  These modifications emphasize
continuing planning and implementation, implement applicable provisions
of the 1977 Clean Water Act and other new executive orders and directives,
and resolve problems with portions of the existing regulations based on
the experience of the last several years.

The proposed regulation significantly reduces the number of specific
requirements placed on State and local governments by the WQM program.
Approximately 150 individual requirements have been eliminated from the
existing regulations; numerous others have been simplified or consolidated.
This reduction is consistent with EPA's commitment to the President as part
of the effort to substantially lessen the burden of requirements on State
and substate agencies.

The State/EPA Agreement:

The State/EPA Agreement required by existing regulations (§130.11 of this
chapter) was designed to establish the level of detail  and timing of
State water quality management plan preparation and assure the orderly
integration of planning efforts and control  activities.  The original
emphasis was on initial plan preparation; the proposed  regulation now
stresses the integrative and coordinative aspects of the Agreement, and
implementation.

Beginning with the publication of this regulation, the  State/EPA Agreement
becomes the primary means to integrate the planning, management, implementa-
tion, and evaluation of programs under the Clean Water  Act; the Resource
Conservation and Recovery Act; and the Safe Drinking Water Act.  EPA is
considering consolidation of State work program submissions for various
other environmental programs into the State/EPA Agreement.   While this
subpart governs only that portion of the State/EPA Agreement relating to
the 106, 208, and 303(e) programs, other programs may be included in a
State/EPA Agreement but will be governed by the applicable provisions of
regulations found elsewhere in this chapter.  The responsibilities of
affected programs regarding the Agreement will be discussed in their
regulations and EPA guidance on State/EPA Agreements.

Every State/EPA Agreement should perform four basic functions:  serve as
a decision document which reflects important decisions  on environmental
and programmatic problems at the State and local level  and the process by
which these problems will be solved; establish State and EPA program
priorities, timing of efforts, State and substate responsibilities, and
the allocation of funds; be a management tool which focuses top State
and EPA decision maker attention on evaluation and accomplishment of major
pollution control objectives; and be a communication and information
document useful to EPA, the States, areawide agencies,  local governments,
and interested or affected publics.  These general objectives apply
regardless of the specific programs and outputs covered by the Agreement.
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One of the keys to a successful Agreement is work program development.   To
provide tangible environmental  improvements, work programs must focus on
problem solutions rather than individual  program activities.   The State/EPA
Agreement will encourage the use of information or results produced in  one
program by other programs.  At a minimum, the Agreement will  contain the
work programs of the various EPA programs that are included (although,  to avoid
a voluminous package, portions may be incorporated by reference).  In
developing the Agreement, program linkages will be defined and duplication
between programs will be minimized, obtaining the greatest benefit from
available resources.  At the maximum, the Agreement will  produce a completely
integrated and coordinated work program for each State.

Most EPA programs which may be included in the State/EPA Agreement have
distinct elements which require fiscal  accountability.  Therefore, all
grant agreements will link outputs with statutory funding sources.  However,
EPA will not allow this requirement to hamper the development of maximum
feasible consolidation, so that States and EPA can minimize submissions
and other paperwork.

Continuing Planning and Implementation:

For water quality management under section 208 of the Act, the proposed
regulation emphasizes planning and implementation activities  that follow
development of the initial plans.  This change in emphasis occurs because
the initial planning phase (generally three years) is approaching completion.
To avoid confusion, the old regulations will continue to govern the
initial planning phase of existing grantees, except in instances specified
in these regulations.  WQM planning conducted after the initial phase,
including plan update and revision, will  be governed by these regulations.
This phase of planning is commonly referred to as "continuing planning",
and is distinguished from the "continuing planning process" required of
States by section 303(e) of the Act, which is also covered by these
regulations.

EPA intends to manage the grant funds in all programs covered under this
subpart in a manner designed to assure that the grantees are accountable
for meeting grant commitments.  Eligibility for continuing 208 or 106
funding will depend upon EPA's assessment of the past performance of the
applicant agency, be it State or areawide.  Success will  be determined,
in part, based on the adequacy of output achievement, the funds saved by
developing more cost-effective solutions, and, in the case of 208, the
degree to which an agency can become self-sufficient.

The proposed regulation places new emphasis on use of sanctions during the
continuing planning period (including the possibility of withholding
construction grant funds after WQM plan approval; see S35.1531-4(b)).
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EPA will use these sanctions to ensure that WQM plans capable of
meeting the goals of the Act are developed, approved, and implemented.
Continuing planning grant funds may be withheld or terminated if a
grantee fails to abide by a grant agreement or meet other planning
responsibilities under this subpart.  Funding from the various statutory
sources covered by these regulations may be withheld for any of a number
of failures specified in the regulations.  For example, a WQM agency
must implement a significant portion of a WQM plan to be eligible for
continuing 208 grants beginning in FY 1980.

EPA's funding strategy for the 208 program, if approved by the Office
of Management and Budget, does not contemplate Federal 208 grants after
FY 1983.  Therefore, all State and areawide agencies conducting planning
with 208 funds should take steps to become self-supporting by that time.

With the approval of the initial plans, the WQM planning program is
entering the implementation phase.  EPA intends the planning supported
under the Act to be implemented.  The regulation emphasizes this phase
because it is critical to the achievement of water quality goals.  WQM
plans must provide assurances that management agencies will implement
the plans.  Work programs will provide for evaluating the implementation
of approved plans.

Incorporation of New Requirements:

Section 208(j) of the Act establishes a cost-sharing program for financing
the installation of Best Management Practices to control agricultural
nonpoint source pollution.  While these proposed regulations outline the
role of WQM plans and management agencies in implementing section 208(j),
regulations prepared by the Secretary of Agriculture shall set forth the
details of the program.

Section 208(b)(2)(A) of the Act requires identification during plan develop-
ment of open space and recreational opportunities expected to result from
implementation of WQM plans.  The proposed regulations incorporate this
requirement.

Section 208(b)(4) of the Act, added by the amendments, authorizes the
development by States of programs for controlling the discharge of dredged
and fill material.  EPA presently anticipates that a regulation governing
the 208(b)(4) program will be incorporated as §35.1580 of this subpart.
However, the 208(b)(4) provisions are still in the drafting stage, and will
be published separately as a proposed regulation in the near future.

The definition of Best Management Practices (BMPs) set forth at 40 CFR
130.2 has been broadened in an attempt to make it compatible with several
provisions added by the Clean Water Act of 1977 which use the term (see
sections 208(b)(4)(B), 304(e), and 404(f)(1)(E)).  The process for
developing BMPs for WQM nonpoint source programs is not affected by the
new definition.
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New requirements to deal  with wetlands and floodplains imposed under
Executive Orders 11988 and 11990 and the Agency's policy on agricultural
lands have been included.  Although section 511(c)(l) of the Act exempts
the WQM programs under sections 106, 208, and 303 from the requirement
for preparation of Environmental Impact Statements, it is EPA policy
that the spirit and intent of NEPA will continue to be served by the
WQM program.  EPA has issued guidance concerning compliance with NEPA in
the water quality management program, which is available to reviewers on
request.  The proposed regulation provides for consideration of water
conservation in the development of WQM plans consistent with the President's
national water resources policy.

In accordance with the President's urban policy announced on iMarch 27,
1978, and EPA's Urban Initiative, the proposed regulation provides that
WQM planning agencies shall assess impacts of the plan on urban development
and consider measures for the prevention of urban sprawl.  WQM plans
must also be consistent with the cost-effectiveness guidelines of the
construction grants program, which are also part of EPA's Urban Initiative.

Additional Changes to WQM Requirements:

Requirements for State certification of WQM plans have been changed in the
proposed regulation.  The existing Agency policy on State certification
requires too many commitments and assurances to be workable.  Experience
has also shown that the existing plan review procedures, providing for
EPA review only after open-ended State review and certification is com-
pleted, have led to lengthy delays and a lack of communication between
EPA and States.  To resolve such problems, the proposed regulations narrow
the scope and number of commitments and assurances required of the States
and provide for a concurrent State-EPA plan review.

The proposed regulation contains a provision which would cut off State 208
funds (and a relevant portion of 106 funds) for failure of the State to act
in a timely manner on a WQM plan.  An alternative approach would be to consider
the inaction of the State to constitute certification.  Comments are invited
concerning how EPA can deal most effectively with State failure to take prompt
action on WQM plans.

The proposed regulation provides procedures for changes in designation
of planning and management agencies.

The regulations set forth in this subpart also constitute EPA's implemen-
tation, in cooperation with other Federal, State and substate agencies, of
the provisions of Section 102(a) of the Act concerning comprehensive programs
for water pollution control.  However, nothing in these regulations shall
preclude EPA from undertaking activities under Section 102(a) independently
of the programs under this subpart, when EPA determines that such programs
need supplementation in order to achieve the water quality goals of the Act.
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The proposed regulation recognizes the important partnership role played by
successful State, regional, and local planning agencies in water quality
management planning and implementation.  The regulation covers responsibil-
ities of both State and areawide planning agencies.  The WQM program
relationships between these levels of government in the development of
State/EPA Agreements and WQM plans, plan evaluation, and other areas are
clarified.

Tlew public participation requirements are included in the proposed regulations
at appropriate points.  The public participation requirements reflect the
recent proposed regulations (40 CFR Part 25, 43 FR 34794) which will
replace 40 CFR 105. EPA encourages consolidation of public participation
programs at the State and local level to minimize duplication where
consistent with public participation goals.   The Part 25 regulations
establish membership and other requirements  for the Advisory Committee
required under S35.1533-3 for 208 agencies.   Only one official Advisory
Committee should be established in accordance with these requirements;
however, this should not discourage the formation of technical sub-
committees with additional representation at the grantee's discretion to
address particular issues.

The proposed regulation includes new detail  on the relationship of the NPDES
program and WQM.  WQM plan provisions to be  incorporated in NPDES permits
under section 208(e) of the Act must be specifically identified in the plan
itself and in any plan approvals.  However,  because this relationship is
technically and institutionally complex, EPA solicits suggestions on
enhancing the effectiveness of these programs through this regulation.

Section 35.1519-6 provides that 208 planning agencies must develop BMPs for
nonpoint sources.  BMPs may also be developed in the WQM process for
certain categories of point sources, such as storm sewers.  These BMPs can be
used in NPDES permits as minimum requirements.

The proposed regulation significantly reduces the specificity for WQM plan
content.  This was done in part because of EPA's commitment to the
President to simplify and consolidate the planning requirements placed
on State and local governments, and in part  because EPA feels that the
grant agreement should be the means for setting out specific requirements
and commitments.  Several commentors have indicated that a greater level
of detail, particularly with regard to plan  content, is necessary to
help the public and the government in the development of work programs
and WQM plans, and to evaluate completed plans (by setting out criteria
for plan approval).  Other commentors have favored the structure proposed
in these regulations, which establishes basic requirements and criteria
and allows some Regional Office flexibility  in implementation through
the grant agreement.  Areas where more detail may be desirable include
monitoring, the attainment of water quality  goals, and reporting
requirements.  EPA also encourages reviewers to comment on the desired
level of detail.
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 Reviewers  should  note  that  EPA  is  presently  studying  implementation of  the
 Federal  Grant  and  Cooperative Agreement Act, and  that  this regulation,  in
 final  form, may use  the  term  "cooperative  agreement"  rather than  "grant".
 Such  a change  will have  no  effect  other than a change  in  nomenclature.

 Under EPA's new "sunset"  policy for reporting requirements in regulations,
 the  reporting  requirements  in this regulation will automatically  expire
 five  years from the  date  of promulgation unless EPA takes affirmative action
 to extend  them.   To  accomplish  this, a provision  automatically terminating
 the  reporting  requirements  at that time will be included  in the text of the
 final  regulations.

 EPA  is committed  to  evaluating  this regulation three years from the date
 of publication.   This  evaluation will assess such factors as overlap of
 requirements,  integration,  alternative methods, enforceability, and
 reporting  requirements.

 Water quality  standards  policy  now in §130.17 is  not  affected by  this
 regulation.  The  Agency  expects that §130.17 will be  incorporated into
 Part  120 of this  chapter.

 The  Agency is  developing  guidance  to complement the regulation.   Draft
 policy on  the  State/EPA  Agreement  is available for review and comment
 from the addressee.  Availability  of other draft  guidance for review and
 comment will be announced in  the FEDERAL REGISTER.  This  regulation and
 forthcoming guidance retain major  elements of existing policy (e.g., policy
 on regulatory  and  nonregulatory programs,  development  and implementation
 of BMPs, and management  agencies).  The policy on regulatory and  nonregulatory
 programs is set forth  in  SAM-31.   SAM-31 was developed with public input
 and  the Agency invites further  comments on the policy which can be obtained
 from  the addressee as  part  of the  review.
DATE;;
1)  4C CFR  is  amended  by deleting Parts 130,
 and 35.551  through 35.570.
35.200 through 35.236,
  2)  40  CFR  is  amended  by adding a  new subpart G as follows:
                    SUBPART  G  --  GRANTS  FOR WATER QUALITY PLANNING,
                            MANAGEMENT  AND IMPLEMENTATION
  §35.1500  Purpose and  scope.
  §35.1501   Applicability.
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§35.1502  Definitions.
§35.1503  Program summary.
§35.1505  Water quality goals.
§35.1507  State/EPA Agreement for water quality management.
§35.1507-1  General.
§35.1507-2  Scope.
§35.1507-3  Content.
§35.1507-4  Role of areawide agencies.
§35.1507-5  Grant agreements.
§35.1507-6  Relationship to approved WQM plans.
§35.1507-7  Development and submission.
§35.1507-8  Public participation in development.
§35.1507-9  Evaluation.
§35.1509  Conflict resolution.
§35.1511  WQM work programs of State and areawide agencies.
§35.1511-1  General.
§35.1511-2  Scope.
§35.1511-3  Areawide agency work programs.
§35.1511-4  Major work elements.
§35.1511-5  Content.
§35.1511-6  EPA review and approval of work programs.
§35.1511-7  Evaluation.
§35.1513  Continuing planning process.
§35.1513-1  General.
§35.1513-2  State priority system.
§35.1513-3  Failure.
§35.1515  State assessment and strategy.
§35.1515-1  State water quality assessment.
§35.1515-2  State strategy.
§35.1517  Selection of 208 planning agencies.
§35.1517-1  Status of existing planning agency designation.
§35.1517-2  Changes in designation status.
§35.1517-3  Delegation of planning activities.
§35.1519  Water quality management planning.
§35.1519-1  General.
§35.1519-2  Applicable regulations.
§35.1519-3  Relationship to work programs.
§35.1519-4  Annual planning outputs.
§35.1519-5  Plan development requirements.
§35.1519-6  Program areas.
§35.1519-7  Planning responsibilities.
§35.1519-8  Planning on Indian lands.
§35.1521  Evaluation, certification, and approval  of WQM plans  and
          designation of management agencies.
§35.1521-1  General.
§35.1521-2  Plan evaluation.
§35.1521-3  Plan certification; designation of management agencies.
§35.1521-4  EPA approval.
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S35.1522  Reviewing plan applicability after approval.
§35.1523  Evaluation of management agency performance.
§35.1525  Change in management agency designation by States.
§35.1529  Intergovernmental coordination and cooperation.
§35.1529-1  General.
§35.1529-2  Federal responsibility.
§35.1529-3  Federal facility compliance.
§35.1531  Implementation.
§35.1531-1  General.
§35.1531-2  Funding.
§35.1531-3  Remedies for failure to implement.
§35.1531-4  Relationship to other programs.
§35.1533  Public participation.
§35.1533-1  Purpose.
§35.1533-2  Work programs.
§35.1533-3  Planning and implementation.
§35.1535  Allotments and reallotments.
§35.1535-1  Allotments.
§35.1535-2  Reallotments.
§35.1537  Grant limitations and administration.
§35.1537-1  Grant amount.
§35.1537-2  Reduction of grant.
§35.1537-3  Budget period.
§35.1537-4  Eligibility.
§35.1537-5  Limitations on award.
§35.1537-6  Allowable and unallowable costs.
§35.1537-7  Audit.
§35.1537-8  Adherence to budget estimates.
§35.1537-9  Program changes.
§35.1537-10  Payment.
§35.1537-11  Financial status report.
§35.1537-12  Disputes under this subpart.
§35.1580  Development of programs for controlling the discharge or
          placement of dredged or fill material.

                    [Reserved]

Appendix A, Water quality and pollutant source monitoring.
          [See Appendix A, Subpart B of Part 35]

Authority:  Section 501(a) of the Clean Water Act, as amended, 33 U.S.C.
1251 et seg.

§35.1500  Purpose and scope.

     This regulation establishes policies, program requirements, and
procedures for water quality management planning and implementation under
the  Clean Water Act and for grants for  such purposes under sections 106,
205(g), and 208 of  the Act.  This subpart supplements the general grant
regulations set forth  in  Part 30 of this chapter.
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§35.1501  Applicability.

     This regulation applies to the continuing planning process under
303(e) of the Act, and to all State and areawide water quality management
planning and implementation activities and related grants under sections
106, 205(g), and 208 of the Act awarded subsequent to the date of publication
of the final regulation in the FEDERAL REGISTER.  This regulation does
not apply to completion of initial plans under section 208.  Completion
of initial plans (and satisfaction of requirements pertaining to plans
conditionally approved prior to the date of publication) is governed by
the earlier regulations superseded by this part, except for plan evaluation,
certification, and approval.  Water quality standards development, review,
and revision are covered under Part 120 of this chapter.

§35.1502  Definitions.

     (a)  The term "the Act" means the Clean Water Act, as amended, 33 U.S.C.
1251 et seq.

     (b)  The term "grants under section 205(g) of the Act", and variations
thereof, means grants under section 205(g)(2) of the Act for non-construction
grants purposes such as administration of approved programs under sections
402 and 404 and grants for administering the statewide waste treatment
management program under section 208(b)(4) of the Act.  The term does not
include construction management assistance grants under subpart F of
this chapter.

     (c)  Other definitions shall  be as set forth in the Act (see, e.g.,
sections 212 and 502).  Further definitions are set forth in the provisions
where the defined term is used.

§35.1503  Program summary.

     (a)  General.

     Water Quality Management (WQM) is the name EPA has given to a complex
environmental program under the combined authority of several sections of
the Act.  The WQM program combines State water pollution programs funded
under section 106, State and areawide comprehensive waste treatment manage-
ment planning funded under sections 205(g) for nonconstruction activities
and 208, and other State planning  mandated by section 303 of the Act
into a single planning and implementation program.  Public participation
is provided for in all aspects of  the program.

     (b)  Water quality management planning.

          (1)  Each State, along with areawide agencies in specially
designated areas, conducts water quality management planning.  Each such
State and substate agency is required to have a plan, which identifies
sources of pollution, the severity of the pollution, and control programs.
Each plan will be revised periodically as needed.  The control  measures
must be designed to attain the 1983 goal of the Act, which is water
suitable for swimming, fishing, and the protection of wildlife, where
attainable.
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          (2)  Each State is required to have a continuing planning process,
which consists of the procedures by which the State controls water pollution
(including WQM planning and implementation).  The State's system for
prioritizing construction grants projects is included in the continuing
planning process.

     (c)  Public participation.

     EPA considers public participation to be a high priority in the WQM
program.  Public participation is provided for in all aspects of the program,
and is discussed in S35.1533.

     (d)  Annual work programs.

     Each year, the State prepares a work program (which is submitted as
part of the WQM portion of the State/EPA Agreement discussed below)
identifying the specific planning and implementation outputs the State will
undertake during the subsequent year with funds from sections 106, 205(g), and
208.  Each designated areawide agency also develops an annual work
program for planning activities funded under section 208.  The priority
problems which a State or areawide agency may address will vary, depending
on the particular needs of the area.

     (e)  Participants.

     The WQM program is a cooperative effort of EPA and other Federal
agencies, States, regional agencies, local governments, and the public.
Each has a role in planning and in implementation.  The Governor of each
State has designated State agencies to manage the WQM program, and, in
most cases, areawide agencies to plan in those areas where particularly
complex water quality problems exist.  The State conducts planning in
areas outside the designated areawide areas and coordinates activities
of areawide agencies.

     (f)  Implementation.

     Implementation of solutions that States and areawide agencies
develop for water quality problems involves many programs and agencies
at all levels of government.  Management agencies are designated by the
Governor to carry out WQM plans.  These agencies must have the capability,
including resources, to implement the assigned programs.  Implementation
may involve construction of treatment works, regulatory programs, management
programs, legislative initiatives, enforcement, or other such activities.
Implementation  is the most important part of the WQM program, because
only with successful implementation will water quality goals be achieved.
Not all implementation relates to the 208 plan p_er se_; the State uses
funds under section 106 of the Act to manage a wide range of WQM activities,
including permit activities under Title IV of the Act.  Various sanctions
are available to EPA to deal with failures in implementation.
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     (g)  Funding.

     State administration and management of the WQM program is supported
primarily by grants under sections 106 and 205(g)  of the Clean Water
Act.  WQM planning by State and substate agencies  is supported primarily
by grants (up to 75 percent of costs) under section 208.  Implementation
is funded from many sources, among them grants under sections 106, 201,
205, 208(j), and 314 of the Clean Water Act, State funds, local  funds,
and funds from other Federal agencies.

     (h)  State/EPA Agreement.

          The WQM program is one of several EPA programs which will  be included
in State/EPA Agreements.  The Agreement is negotiated each year between
the Regional Administrator and the Governor.  It identifies WQM problems and
objectives, describes coordination with other environmental programs,
summarizes major work program outputs, and includes a detailed annual work
program for WQM.

§35.1505  hater quality goals.

     The water quality goals are:

     (a)  those set forth in section 101 of the Act, including protection
and propagation of fish, shellfish, and wildlife and provision for recreation
in and on the water by 1983 wherever attainable, restoration and maintenance
of the chemical, physical, and biological  integrity of the Nation's  waters,
and prohibition of toxic substances in toxic amounts;

     (b)  achievement of water quality standards;

     (c)  protection of public health and welfare; and

     (d)  reduction of water pollutants from nonpoint sources to the
maximum extent feasible.

S35.1507  State/EPA Agreement for water quality management.

§35.1507-1  General.

     (a)  The State/EPA Agreement integrates planning, management, and
implementation of all EPA programs which the State and the Regional
Administrator elect to include.  In addition, the  Agreement reflects
appropriate coordination with other Federal, State, regional, and local
planning programs affecting or affected by the activities under this subpart.
Starting in FY 1980, the Regional Administrator shall not award assistance
under this subpart unless he or she has determined that the State has
coordinated, and integrated to the maximum extent  feasible, all  work program
elements of the WQM program with other EPA programs included under the
State/EPA Agreement.

          (b)  The Regional Administrator  and the  Governor will  negotiate
the WQM portion of State/EPA Agreement on State and EPA responsibilities

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and funding.  The Agreement shall (1) ensure that water pollution is
controlled in a cost effective manner;  (2) coordinate programs, simplify
paperwork, and improve program accountability; and (3) serve as the
management tool for the WQM programs and as a public information document
by identifying activities to be funded and describing the relationship
between WQM activities and other environmental programs of the Agency.
The Agreement is negotiated annually, but may cover commitments to be
performed over a longer period.

     MOTE:  The State/EPA Agreement is not the same as any memoranda of
agreement negotiated between a State and EPA governing the operational
aspects of other programs such as the permit programs approved under
sections 402 and 404 of the Act and implementing regulations (see 40 CFR
123.5), and construction grant delegation agreements under section
205(g) of the Act and implementing regulations (see 40 CFR Part 35,
subpart F).  However, the State and the Regional Administrator may agree
to include such agreements under the State/EPA Agreement for ease of
coordination, if the particular requirements applicable to those Agreements
are complied with.

§35.1507-2  Scope.

     The WQM portion of the State/EPA Agreement must cover the WQM
program funded under sections 106, 208, and 205(g), and the State's
responsibilities under section 303(e) of the Act.

S35.1507-3  Content.

     The WQM portion of the State/EPA Agreement consists of the following:

     (a)  A statement of water quality management problems and objectives,
based on the State's problem assessment and strategy developed under
835.1515.

     (b)  A description of coordination among water quality management
programs and other environmental programs to avoid inconsistent, dupli-
cative, or environmentally unsound activities.  (For example, coordination
with programs to control solid and hazardous waste; in particular,
residuals planning and management responsibilities in relation to the
requirements of section 4006 of the Resource Conservation and Recovery
Act (RCRA)).

     (c)  A summary of major work program outputs, associated funding
(and sources), and agency responsibilities for completing the outputs.

     (d)  A work program under §35.1511.

§35.1507-4  Role of areawide agencies.

     For areawide agencies, the WQM portion of the State/EPA Agreement sets
a policy framework based on the State strategy, and should include priorities
for areawide action and timing of major outputs.  Because of the importance
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of their role, designated areawide planning agencies shall be continually
involved in development of all relevant aspects of the Agreement.  Failure
to involve the areawide agencies shall be a basis for disapproval of the
WQM portion of the State/EPA Agreement.  Comments of the areawide agencies
(if any), the State's responses, and a brief summary of the participation
of areawide planning agencies in development shall be forwarded to EPA
with the draft Agreement.  Nothing shall preclude the right of the
designated areawide agency to submit comments directly to EPA.

S35.1507-5  Grant agreements.

     To avoid duplication, the WQM portion of the State/EPA Agreement
should constitute the narrative portion of the application for grant funds.
In the event of funding delay, the State/EPA Agreement may be negotiated
prior to grant award.  No grant under this subpart shall be awarded
unless the Regional Administrator and the Governor (or other State repre-
sentative) have signed the WQM portion of the State/EPA Agreement in
accordance with §35.1507-7(b).  The Regional Administrator may award a
grant to one agency, a grant which directs funds to more than one agency,
or separate grants to the various agencies which will be performing
under the Agreement.

S35.1507-6  Relationship to approved WQM plans.

     The Regional Administrator shall not enter into the WQM portion of a
State/EPA Agreement unless the Regional Administrator determines that it
is compatible with the approved State WQM plan (which includes approved
elements of areawide plans).

S35.1507-7  Development and submission.

     (a)  The State and the Regional Administrator shall develop a draft
of the WQM portion of the State/EPA Agreement on an agreed-upon schedule.
A draft Agreement shall be submitted to the Regional Administrator not
later than June 1 of each year.  The Regional Administrator shall review
the draft for compliance with the requirements of this subpart and
provide comments to the State within 30 days of receipt.

     (b)  The final WQM portion of the State/EPA Agreement shall be
submitted to the Regional Administrator not later than September 1 of
each year.  The Agreement shall be effective upon signature by the
Regional Administrator and the Governor or, if the Regional Administrator
and the Governor agree that it is appropriate, by one or more heads of
State executive agencies.

S35.1507-8  Public participation in development.

     Early in the process under S35.1507-7(a), the State shall notify
the public about the goals and scope of the Agreement (including the
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work program) and shall schedule opportunities for consultation with the
public.  The State shall consult with the advisory committee established
under S35.1533-3.  Prior to submission of the draft Agreement to EPA,
the State shall distribute to the public a fact sheet'which explains in
layman's terms the contents of the proposed Agreement and hold a public
hearing in accordance with Part 25 of this chapter.  A summary of significant
public comments from the hearing and other sources (including the advisory
committee) and the State's responses shall be forwarded to EPA with the
draft Agreement.

S35.1507-9  Evaluation.

     Annual evaluation of implementation of the State/EPA Agreement
shall be conducted with the evaluation of the work program under §35.1511-7,
or on any other basis established in the State/EPA Agreement.

§35.1509  Conflict resolution.

     The State shall develop procedures for resolving conflicts among the
State, designated areawide agencies, local governments, and potential and
designated management agencies, in accordance with EPA guidance.  A written
statement of such procedures shall be submitted to the Regional Administrator
for approval as an output of the FY 1979 work program.  Once approved, it
need not be resubmitted, unless amended substantially.  Nothing shall preclude
the right of any agency to request EPA comment and review, after exhausting
available procedures at the State level.  All agencies and members of the
public have the right to submit comments to EPA.

§35.1511  WQM work programs of State and areawide agencies.

S35.1511-1  General.

     (a)  The annual work program of States and areawide agencies provides
the basis for tying available Federal and non-Federal funds to the
requirements of this subpart, in order to achieve the water quality goals
of the Act.  It translates the requirements of this subpart and the EPA
annual guidance into specific output commitments, including WQM planning.

     (b)  Most State control program expenses (including expenses of
staffing to meet 208 implementation responsibilities) will be funded
under  section 106 of the Act.  State funding under section 208 of the
Act is available primarily for planning in nondesignated areas.  Thus,
the major portion of the wQM program (including permits administration,
monitoring, enforcement, and administration of nonpoint source programs)
at the State level is a 106-related effort.

     (c)  The State's work program shall be based on the continuing
planning process, the water quality problem assessment, and the State
strategy, and shall indicate how the problems identified in the strategy
and assessment will be handled and how the WQM requirements will be met.
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Although the work program is an annual submission, the Regional Administrator
may allow outputs to be addressed on a multi-year basis as long as the
Regional Administrator determines that EPA oversight and evaluation
capability remains unaltered.  Areawide planning agency work programs
are developed separately in accordance with §§35.1511-3 and 4.   The
Regional Administrator shall review work programs of both States and
areawide agencies to assure that redundant outputs are not included.

§35.1511-2  Scope.

     The State and areawide work programs shall identify outputs and
associated funding within the appropriate work elements of §35.1511-4.
Specific consolidation efforts should be made concerning planning agencies'
use of common data bases, simplified and coordinated reporting, and other
elimination of conflict and redundancy among programs.  Work programs shall
meet the requirements of §35.1529 concerning intergovernmental  cooperation.

§35.1511-3  Areawide agency work programs.

     The WQM portion of the State/EPA Agreement sets the policy framework,
based on the State strategy, for areawide work programs.  The !/\iQM portion
of the State/EPA Agreement should include priorities for areawide action and
timing of major outputs.  Areawide planning agencies which the Regional
Administrator determines should receive 208 funding must submit a draft
and final work program in accordance with the requirements of §35.1511
concurrently to the State for review and to EPA for approval.  Draft and
final areawide work programs shall be submitted on the same schedule as
the State submissions (see §35.1507-7).  The State shall have 30 days to
review and comment on the adequacy of the areawide work program and its
compatibility with the WQM portion of the State/EPA Agreement and the
State WQM plan, and shall submit its comments, if any, to both the
areawide agency and EPA.  Areawide agency work programs must also meet the
public participation requirements of §35.1507-8, including consultation
with the areawide agency's advisory committee.

§35.1511-4  Major work elements.

     (a)  General.

     EPA will provide annual guidance (see §35.404 of this chapter)
identifying specific outputs under the major program elements listed
below.   Each work program shall be free from redundant or inconsistent
outputs; common outputs (i.e., funded from more than one program) may
be developed (see §35.1537-7).  An important output of the State is the
annual  project priority list for construction grants (both the fundable
and extended portions), developed and approved in accordance with §35.915.

     (b)  Areawide agencies.

     Areawide agencies shall receive grants directly from EPA.   Grants to
areawide agencies under this subpart are only for water quality management
planning under section 208 of the Act.  In addition, such agencies may
receive funds from the State, under interagency agreement, to perform
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specific activities on behalf of the State under sections 106,  205(g),  208,
and 314 of the Act; however, such activities remain the responsibility  of
the State and are not outputs for which the areawide agency is  directly
accountable to EPA.  Areawide agencies similarly may receive funds from other
substate agencies; for example, to perform facilities planning  activities.

     (c)  State agencies.

     With approval of the Regional Administrator after negotiation with
the State, the State may receive funding for the following elements (potential
funding sources shown in brackets):

          (1)  Construction grants management, including development of
the project priority list (to the extent not funded under subpart F),
and planning for and management of pretreatment programs [106,  205(g),  208].

          (2)  Administration of permits programs, including programs under
sections 402 and 404 of the Act [106, 205(g)].

          (3)  WQM planning and certification [primarily 208; 106 where the
Regional Administrator determines appropriate; 205(g) for development of
the 208(b)(4) program].

          (4)  Water quality standards development, review, and revision
[106, 208].

          (5)  Nonpoint source management activities [106].

          (6)  Monitoring and assessment [106, 203].

          (7)  Enforcement  (including compliance assurance and  litigation
support activities) [106].

          (8)  Training and facilities operation and maintenance [106].

          (9)  Emergency response programs [106].

          (10)  Evaluation  [106, 208].

          (11) Administration of regulatory and other water quality
control programs  [106].

          (12) Planning for and coordination with section 208(j)
programs  [106, 208].

          (13) Administration  [106, 205(g), 208].

          (14) Public participation in accordance with S35.1533
[106, 205(g), 208].

S35.1511-5  Content.

     The  draft and final work  program submitted by an areawide agency or
by  the  State shall contain  the following:

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     (a)  A summary and evaluation of the current year's program, including
outputs produced and those not completed, and a summary of public partici-
pation.

     (b)  Identification of the outputs to be produced under each program
element in §35.1511-4, and, for each output, the person-years to be used;
the costs; the funding source(s); milestones for completion of the
output; a disbursement schedule; and the agency(ies) responsible.

§35.1511-6  EPA review and approval of work programs.

     (a)  The areawide agency work program, and the State work program
submitted as a part of the State/EPA Agreement, shall be forwarded to the
Regional Administrator in accordance with the schedule in §35.1507-7.
Grants shall be awarded only upon approval of the work program.   The Regional
Administrator may award a grant under this Subpart with special  conditions
if the work program requires minor changes.  In such an event, the
Regional Administrator shall provide the agency with a statement of
deficiencies in the work program and revisions which must be made to
obtain approval.  The grant award shall include this statement and a
schedule for making the corrections.  Noncompliance may result in a
reduction of grant amount or termination.

     (b)  The Regional Administrator shall not approve a designated areawide
agency's work program if, based on the Regional Administrator's  review and
advice from the State, the Regional Administrator determines that the work
program is incompatible with the State strategy and EPA guidance.

     (c)  The Regional Administrator shall review the work program of each
State and areawide agency to determine if it meets these requirements, and
to determine:

          (1)  The consistency of the work program and expected  products
with this subpart and EPA guidance, including any EPA guidance designed
to coordinate activities under this subpart with activities under other
EPA programs.

          (2)  The feasibility of achieving expected results in  relation
to the nature of problems, authority, organization, past performance of
the agency(ies) involved, and their available resources.

     (d)  The Regional Administrator shall not approve a work program for
any agency which has had its WQM plan or an element thereof approved with
conditions unless he or she determines that the agency is moving as rapidly
as possible to fulfill the conditions.

§35.1511-7  Evaluation.

     It is EPA policy to limit EPA evaluation to that which is necessary
for responsible management of the national effort to control pollution.
Each Regional Administrator shall  hold meetings to review and evaluate
State and areawide programs as follows:
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     (a)  Mid-year evaluation.

     The Regional Administrator shall  conduct a joint, on-site, mid-year
evaluation meeting with each State and designated areawide agency, and
hold a public meeting, to review and evaluate the program accomplishments
of the current budget period under the work program and to discuss the
work projected for the coming year.

     (b)  Other reviews.

     The Regional Administrator may conduct an end-of-year evaluation
meeting with appropriate State and other officials to review the accomplish-
ments of the program year, and such other reviews as are deemed appropriate.

     (c)  Reports.

     The Regional Administrator shall  prepare a written report of each
evaluation, forward a copy to the grantee (and the State, where the grantee
is an areawide agency), and notify the public of the report's availability.

§35.1513  Continuing planning process.

§35.1513-1  General.

     Each State shall have an approved Continuing Planning Process (CPP)
for both point and nonpoint sources as required by section 303(e) of the
Act and EPA guidance.  The CPP shall respond to the objectives and
requirements of all relevant provisions of the Act, and shall cover both
planning and implementation responsibilities.  The CPP shall be described
in a document submitted by the State to, and approved by, the Regional
Administrator.  It consists of the operating policies, procedures, and
practices that comprise the water quality management program of the
State; describes program working relationships; and sets forth the
procedures that will govern the development of the WQM portion of the
State/EPA Agreement.  Revisions to the approved CPP description shall be
developed as outputs of the State's work program.

§35.1513-2  State priority system.

     The CPP includes the State priority system for construction grants,
developed in accordance with §35.915 of this chapter.  The State priority
system describes the methodology used to rate and rank municipal wastewater
treatment projects eligible for grant assistance under subpart I.  It
also sets forth the administrative, management, and public participation
procedures required to develop and revise the State project priority
list under §35.915(c).  Under §35.1531-4(b)(2), areawide priorities are
developed consistent with the State priority system.

§35.1513-3  Failure.

     The CPP is the process under which State WQM planning is conducted.
Therefore, a substantial failure of State WQM planning and implementation
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may indicate a deficiency in the CPP for which the Regional Administrator
may withdraw approval of the CPP.  Under section 303(e) of the Act,
State failure to maintain an approved CPP constitutes grounds for withdrawal
of National Pollutant Discharge Elimination System (NPDES) program
approval.  Further, if the Regional Administrator determines that the
CPP, as implemented and revised, does not meet the requirements of the
Act and this part, he may withhold grant funds available to the State
under sections 106, 205(g), 208 and 314 of the Act.  Disapproval of a portion
of the CPP need not require disapproval of the whole CPP; for example,
the priority system under §35.1513-2 may be determined approvable by the
Regional Administrator in spite of a failure of other portions of the
CPP.

§35.1515  State assessment and strategy.

§35.1515-1  State water quality assessment.

     (a)  General.

     The State must conduct a water quality assessment based on water
quality goals (S35.1505).  The assessment shall identify water quality and
source control problems for programs funded under sections 106, 205(g),
and 208 of the Act, and shall link planning and implementation by
determining the effectiveness of control programs (e.g., BMPs and NPDES
permits) in achieving water quality goals and by indicating where additional
controls are necessary to achieve those goals.  Future assessment activi-
ties shall build on existing data.  The Regional Administrator shall
not approve funding for further assessment activities unless it is
determined that the work will not duplicate past efforts.  Except where
otherwise determined by the Regional Administrator, State assessment
activities shall be funded only under section 106 of the Act.  Updates
of the assessment will be developed as WQM outputs of the work program.
Assessment data should be available to the State by the first of each
calendar year for use in developing the State strategy and the WQM
portion of the State/EPA Agreement.

     (b)  Content.

     The problem assessment must include:

          (1)  The water quality descriptions and constituent analyses
of point and nonpoint source problems and control needs in accordance
with section 305(b) of the Act and EPA guidance for surface and ground
waters.   The assessment must be based on land use, demographic, and
economic data and projections for 20 years in 5-year increments.  (Data
must be consistent with the EPA cost-effective guidelines under subpart
E, Appendix A.)  For all  areas (including rural areas), the relationship
between the severity and geographic extent of water quality problems and
other environmental problems, such as air quality or solid waste disposal
problems, must be considered.  The location and nature of the problems,
and if possible, point and nonpoint source loads, must be identified.
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          (2) An analysis of the individual and cumulative impact on
receiving waters of activities causing nonpoint source pollution.

          (3)  The classification of stream segments in accordance with
section 303(d)(l)(A) of the Act and EPA guidance, consistent with the
needs assessment prepared under section 516(b) of the Act.

          (4)  An evaluation of the effectiveness of existing point and
nonpoint source control programs in achieving water quality goals.

          (5)  Other assessments required by programs not funded by
sections 106 and 208 which are considered appropriate for developing
the WQM work program and WQM plans; for example, relevant data from the
inventory of land disposal under section 4005 of RCRA; the identification
and classification of publicly owned fresh water lakes required under
section 314 of the Act; and estuarine reports required by section 104(n)
of the Act.

     (c)  Role of areawide agencies.

     With the approval of the Regional Administrator, designated areawide
agencies may also conduct problem assessment for their planning areas as
necessary to meet areawide U'QM responsibilities.  State problem assessment
activities under sections 106 and 208 may be delegated under interagency
agreement to areawide agencies.

§35.1515-2  State strategy.

     (a)  General.

     The State shall prepare and annually update a five-year strategy for
controlling water pollution problems from point and nonpoint sources.  It shall
address the problems identified in the assessment developed under §35.1515-1.
It shall be consistent with the management agency performance evaluations
developed under §35.1523 and with approved and certified State and area-
wide WQM plans, although the strategy may be used to recommend revisions in
approved plans.  The strategy shall include:

          (1)  Goals for WQM over a five-year period.

          (2)  Priorities for controlling the problems identified in the
problem assessment, and in the management agency performance evaluation,
including:

          (i) the construction grant project priority list, and

          (ii) priority rankings for total maximum daily loads and waste-
load allocations development under §35.1519-6(a).

          (3)  A summary of anticipated planning and implementation
activities for priorities identified in (a)(2) of this section.
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               An identification of governmental entities responsible for
conducting the activities identified in (a)(3) of this section.

          (5)  A summary of anticipated Federal and non-Federal funds for
the five-year period for the activities and entities identified in (a)(3)
and (4) of this section, for use by EPA in determining resource needs and
allocations.

      (b)  Role of areawide agencies.

      Since the State strategy is used in the Regional Administrator's
review and approval of the areawide agency's work program (see §35.1511-3),
the State shall involve each affected areawide agency in development of the
strategy, and shall consider priorities suggested by the areawide agency.
The State shall forward a summary of areawide participation and State
response to comments received from areawide agencies to EPA with the strategy.

      (c)  Public participation.

          (1)  Early in the process of strategy development, the State
shall notify the public about the goals and scope of the strategy and shall
schedule opportunities for public participation.  The State shall  consult,
in accordance with Part 25 of this chapter, with the State advisory committee
established under §35.1533-3.  The State shall distribute a fact sheet which
explains in layman's terms the contents of the proposed strategy and hold a
public meeting in accordance with Part 25.  The meeting may be consolidated
with  other meetings or hearings.  A summary of significant public comments
from  the meeting and other sources and the State's responses shall be
forwarded to EPA with the strategy.

          (2)  Public participation requirements for priority list develop-
ment  shall be as set forth in §35.915 of this chapter.   To avoid duplication,
public participation activities for list development should be combined
with  other such activities under this section wherever practicable.

      (d)  Submission.

      Each year, the strategy shall be submitted by April  1 to the Regional
Administrator for review and comment to provide guidance in work
program development and assistance in negotiating the State/EPA
Agreement.  With approval of the Regional  Administrator,  the priority list
developed under §35.915 of this chapter may be submitted separately.

§35.1517  Selection of 208 planning agencies.

§35.1517-1  Status of existing planning agency designation.

     A designated State, interstate, or areawide planning agency shall  retain
its designated status unless changed in accordance with this section.  While
planning grant funds will be awarded only to designated agencies,  designa-
tion does not automatically entitle any agency to grant funds.   An agency
must meet all requirements of this subpart to become or continue to be
eligible for funding.


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S35.1517-2  Changes in designation status.

     (a)  General.

          (1)  As of the date of publication of the final regulations,
virtually all areas of the United States are covered by 208 planning by
existing State or designated areawide agencies.  Generally, therefore,
it is not necessary for Governors to designate new areawide planning
agencies, since a change in planning responsibility usually can be
accomplished through a change in designation.  With EPA approval, the
Governor may:

               (i)   designate a new State planning agency to replace the
existing State planning agency;

              (ii)   designate a new areawide planning agency for an area
previously administered by the State (note S35.1517-2(a)(3));

             (iii)   designate a replacement areawide planning agency for
an existing designated agency in a planning area;

              (iv)   remove the designation from an existing area and
agency, thereby replacing it with the State planning agency;

               (v)   alter the boundaries of existing planning areas.

          (2)  All  actions under (a)(l) of this section require the
approval of the Regional Administrator, and such changes will be approved
only if he or she determines that there is a compelling need for the
change and that the procedures set forth below have been followed.
Generally, designation changes should not be made where delegation of
specific responsibilities through interagency agreement may accomplish
the desired ob.iective.  Preference should be qiyen to replacement agencies
and delegees which  have planning  responsibilities  in  other Federal,
State, regional, and local environmental and land use planning programs:

          (3)  Designation of new areawide planning agencies for areas
previously administered by the State shall be subject to the procedural
requirements of this section and any additional procedures the Regional
Administrator considers appropriate to meet the intent of section 208(a)(2)
of the Act.

     (b)  Procedures.

          (1)  The  Governor shall propose any change in area or agency
designation in a written statement, which shall contain the reasons for
the proposed change, the impact on applicable time schedules and achievement
of program requirements, and the identification of a proposed replacement
agency or change in planning area boundaries.  This statement shall be
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sent to the Regional Administrator, to the head of the agency to be replaced,
and to the chief elected officials of general purpose governments in the
affected area.  The statement shall also be available for public review in
the affected area.

          (2)  Except where the proposed change is contained in a certified
and approved WQM plan, following distribution of the statement, and not less
than 30 days prior to the effective date of the proposed change, the State
shall hold a public meeting in the affected area.  Advance notice of the
meeting shall be given in accordance with Part 25 of this chapter.  Before
the change is approved, the State shall submit a summary of significant
public comments received at the meeting and elsewhere, and the State's
responses, to the Regional Administrator.

          (3)  If there is significant public controversy concerning the
proposed action, the Regional Administrator should conduct a public meeting
in the area.

          (4)  The Regional Administrator shall approve the designation
change if he determines that the proposed change is consistent with (a)(2)
of this section and that the proposed replacement agency has the authority,
capability (including resources) and willingness to undertake its responsi-
bilities.

     (c)  Grant funds.

     Generally, as soon as the Regional Administrator determines that an
agency may lose its designation, and if unexpended grant funds remain, the
Regional Administrator should issue a stop work order under §30.915 of
this chapter.  A stop-work order is not needed where the agency to be
replaced is allowed by the Regional Administrator to complete its assigned
tasks.  Upon designation change, the Regional Administrator shall either
transfer the grant under §30.900-3 of this chapter to the replacement
agency, or terminate the grant under §30.920 of this chapter and provide
part or all the funds released to the replacement agency.  The final
decision of the Regional Administrator may be appealed in accordance
with §30.920-5.

§35.1517-3  Delegation of planning activities.

     Designated State and areawide agencies may delegate (through inter-
agency agreements) planning activities, but not ultimate responsibilities
for planning, to other State, Federal, Regional, local, and interstate agencies
for the conduct of work under this subpart.  Delegation shall take place
through a written agreement executed by the two agencies, subject to the
approval of the Regional Administrator, specifying outputs and time schedules.
If a State or areawide agency intends to delegate any major planning
activities under this paragraph then:
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     (a)  Locally elected officials of governments having jurisdiction in
the affected area shall be consulted prior to execution of the agreement, and

     (b)  The draft of the delegation agreement should be distributed widely,
with a public meeting held thereafter at least 30 days prior to the execution
of the agreement.

§35.1519  Water quality management planning.

§35.1519-1  General.

     WQM plans shall be prepared as outputs of the work program by States
under sections 208 and 303(e) of the Act and by areawide agencies under
section 208 of the Act.  The term "WQM plan" as used in the context of
this regulation refers to the initial plan and subsequent revisions
and additions prepared in accordance with section 208(b) of the Act.
After a WQM plan is adopted by the areawide agency, certified by the
Governor, and approved by EPA under §35.1521, it shall be considered a
part of the State's WQM plan.  Water quality management decisions are
controlled by the applicable provisions of the approved State and areawide
plans.

§35.1519-2  Applicable regulations.

     (a)  Except as otherwise provided in this subpart, initial planning
begun as of the date of publication of final regulations is governed by
the requirements formerly published as 40 CFR Parts 130 and 131, and
§35.200 through §35.236, which shall remain applicable in uncodified form
to the development of initial WQM plans and, to the extent practicable,
completion of work needed to fulfill conditional approvals prior to the
date of publication of final regulations.

     (b)  All WQM planning subsequent to development of initial plans
shall be in accordance with the requirements of this part.

§35.1519-3  Relationship to work programs.

     All planning activities of State and areawide planning agencies under
this subpart are controlled under work programs under §35.1511.  While
funding generally will be available on an annual basis, the approved work
program may include planning products which will be developed on a multi-
year basis.  Multi-year outputs generally shall be evaluated on an interim
basis under §35.1511.

§35.1519-4  Annual planning outputs.

     To be eligible for grant funds for planning, each State and areawide
agency shall submit, as part of its work program, specific proposed outputs
under §§35.1519-5 and 35.1519-6.  WQM planning must eventually address all
program areas (eee §35.1519-6), although annual work programs will only
deal with current priorities.  Within the context of the WQM portion of
the State/EPA Agreement, the Regional Administrator shall negotiate with
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each State and areawide agency to determine activities which will have
priority for funding in each year, in accordance with annual EPA guidance.
The Regional Administrator shall not approve funding for any output unless
he determines that it is consistent with section 208(5) of the Act and
attainment of water quality goals.

S35.1519-5  Plan development requirements.

     l.'QM plans shall be developed to address point and nonpoint program
areas discussed in §35.1519-6 in accordance with the following requirements:

     (a)  Control  needs.

     The plan shall evaluate alternative control strategies and select
point and nonpoint source control programs (in accordance with sections
208(b)(2)) for areas under S35.1519-6.  A schedule for implementing
control programs shall  be included.  The specific conditions (including
effluent limitations for water quality standards and BMPs) to be included
in NPDES permits or categories of permits under section 208(e) of the
Act shall be clearly identified in the proposed and final plan.  The
State is responsible for providing appeal procedures for these conditions.
EPA permit appeal  procedures are not available for such conditions.  The
plan must set forth an explanation of how these procedures have been or
will be implemented.

     (b)  Regulatory and other programs.

     For control programs identified in S35.1519-5(a), the plan must
identify regulatory or other programs under which the control programs will
be administered.  Existing regulatory programs should be used where
effective.  Any necessary modifications to existing programs shall be described.
Regulatory programs shall have adequate capability including:  enabling
legislation, ordinances, and other legislative requirements; financing,
staffing, and other administrative arrangements; and inspection, enforcement,
and surveillance authority.  Nonregulatory programs shall have adequate admin-
istrative arrangements, financing, public education programs, and surveillance
capability.

     (c)  Management agencies.

          (1)  The plan shall propose management agencies for implementing
the programs selected.   Agencies identified shall have adequate authority
and capability to  fulfill responsibilities assigned under the plan and
shall submit a brief written commitment to fulfill those responsibilities.

          (2)  No  later than submission of the WQM plan under §35.1521-2(b),
the planning agency and each major management agency (those which have primary
responsibility for controlling a source) shall forward to the Governor and
the Regional Administrator a letter of commitment which will formalize
the management agency's acceptance of responsibilities assigned to the
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management agency by the plan.  The letter shall  indicate the legal
authority, the administrative and financial capability that the agency
has or is seeking in order to carry out its assigned responsibilities,
a time schedule, reporting procedures, assurance of coordination with
the planning agency, public participation procedures, and implementation
actions under way or completed.

          (3)  Proposed management agencies which are to receive construction
grant funding shall meet the requirements of section 208(c)(2) of the Act
and §35.900 through §35.965 of this chapter before they may be designated.

          (4)  A management agency shall  not be designated to carry out
regulatory responsibilities if the Regional Administrator determines that
(i) a majority of membership of the agency consists of members or
representatives of the regulated class, or (ii) the proposed agency is
otherwise substantially under the control of members or representatives of
the regulated class.

     (d)  Environmental, social, and economic impacts and recreational
          opportunities.

     The plan shall assess environmental, social, and economic impacts of
implementing plan provisions.  This assessment shall include an analysis
of primary and, to the extent feasible, secondary impacts of alternative
WQM programs and actions. The planning process and plan content shall be
consistent with the intent of NEPA, the Executive Order on Flood Plain
Management (11988), the Executive Order on Wetlands Protection (11990),
published Agency policy on floodplain management and agricultural lands,
and other applicable environmental requirements cited in Part 30 of this
chapter.  Plans shall conform with applicable air quality State implementation
plans.  An analysis shall be made of open space and recreational opportunities
that can be expected to result from improved water quality, including
consideration of potential use of lands associated with treatment works
and increased access to water based recreation.  Measures taken to
coordinate with State and local recreation programs and Step 1 facilities
planning regarding recreational opportunities shall be identified in the
plan.

     (e)  Urban impacts.

     The plan shall assess the impact on urban development and contain measures
for mitigation of adverse impacts to assure consistency with the President's
urban policy and the EPA Urban Initiative to minimize urban sprawl, as
implemented in subpart E, Appendix A.

     (f)  Public participation.

     The planning process shall be conducted in accordance with §35.1533.
In addition, the WQM planning agency shall involve potentially affected
agencies including general purpose units of local governments, proposed
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and designated management agencies, and other affected State and Federal
agencies (e.g., air, solid waste, drinking water, and fish and game
offices) in planning activities in the same manner as the general public.

     (g)  Coordination with other programs.

     Water quality program activities shall be coordinated during plan
development with any other programs related to WQM, as discussed in
§35.1529.  Efforts should be made to achieve common planning agencies
and areas, data bases, advisory bodies, and public participation programs;
to simplify and coordinate reporting requirements; and to develop programs
which are consistent with other programs related to WQM.

     (h)  Plan evaluation and revision.

     The plan shall contain procedures for evaluating the effectiveness
of plan implementation (e.g., application of BMPs) in achieving water
quality goals.  Provisions shall be made for revising WQM plans in an
iterative manner as necessary to achieve those goals.  The assessment
developed under §35.1515-1 will be a principal means of conducting the
evaluation.

§35.1519-6  Program areas.

     The following point and nonpoint program areas shall be addressed
through the plan development process described in §35.1519-5.  The specific
responsibilities of State and areawide WQM agencies are indicated below.

     (a)  Total maximum daily loads, wasteload allocations.

     States shall develop total maximum daily loads and wasteload allocations
consistent with the priorities established under §35.1515-2(a)(2).  Areawide
agencies shall perform this activity only where delegated under interagency
agreement between the State and areawide agency.  Wasteload  allocations
to be incorporated into NPDES permits under section 208(e) must be
specifically identified (see §35.15195(a)).

     (b)  Dredged or fill programs.

     The State may develop programs for the control of the discharge
of dredged or fill material under section 208(b)(4)(B) of the Act in
accordance with §35.1580.

     (c)  Nonpoint source control.

          (1)  Feasible Best Management Practices (BMPs) for nonpoint
surface water (and ground water) quality and source control  problems shall
be developed under section 208(f) through (k) of the Act to  achieve
water quality goals (see §35.1505).  For nonpoint source control purposes,
BMPs are those methods, measures, or practices to prevent or reduce
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water pollution and include but are not limited to structural  and nonstructural
controls, and operation and maintenance procedures.  BMPs can  be applied
before, during, and after pollution-producing activities to reduce or
eliminate the introduction of pollutants into receiving waters.   Economic,
institutional, and technical factors shall  be considered in determining
feasibility.  BMPs shall be developed in a continuing process  of identifying
control needs (see §35.1519-5(a)) and evaluating and modifying the BMPs
as necessary to achieve the goals.

          (2)  Nonpoint source regulatory programs shall be identified
for implementation of BMPs where regulation is necessary to ensure BMP
implementation.  Nonregulatory programs are acceptable only where such
programs will result in achievement of water quality goals.  Nonregulatory
programs may supplement regulatory programs.

          (3)  Under section 208(b)(4)(A) of the Act, States may assume
responsibility for identifying nonpoint source control needs and developing
control programs in designated areas.

     (d)  Municipal and industrial waste treatment systems.

          (1)  Wastewater treatment facilities needs for 20 years shall be
determined after assessing alternative waste disposal facility needs.
Operation and maintenance needs shall be identified.  NPDES permit require-
ments (including pretreatment standards), results of prior Step 1 facility
planning, regulatory programs that control  the location, modification,
and construction of facilities for municipal and industrial wastewater
treatment, water conservation needs, and pretreatment programs for
industrial wastewater shall be considered.   Under S35.1531-4(b)(2),
facilities needs lists shall be developed consistent with the State
priority system.  The Regional Administrator shall assure that work of
the areawide agency in this area is consistent with the priority list
development needs and activities of the State under §35.915.

          (2)  Under S35.915(b), the State is required to maintain a
listing of all needed treatment works.  This State needs inventory,
prepared under section 516(b) of the Act, should be used to satisfy the
wastewater treatment facilities needs requirement under paragraph (d)
(1) of this section.

          (3)  All wastewater treatment facility needs in approved
areawide WQM plans shall be included in the State needs inventory, except
where the State or Regional Administrator determine that a project
would be ineligible for a construction grant.  Areawide agencies shall
use procedures and criteria established by the State and EPA under
section 516(b) of the Act when updating facility needs assessments.
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     (e)  Urban stormwater.

     Requirements for improving stormwater systems must be identified.
BMPs must be established in the same manner as described in (c) of this
section.  Regulatory programs must be established to control the location,
modification, and construction of facilities for municipal stormwater
management.  Fiscal analysis of the necessary capital and operations and
maintenance expenditures must be included.

     (f)  Residual waste control, land disposal.

     Control needs for waste disposal to protect water quality and ground
water supplies shall be identified.  Relationships of residual waste disposal
needs to wastewater treatment facility needs (e.g., toxic solid waste
disposal, land treatment) shall be described.  Activities under WQM planning
and the Resource Conservation and Recovery Act shall be coordinated.  Regula-
tory programs to control the location, modification, and construction of
facilities for residual waste disposal and other program needs shall be
established to achieve water quality goals.  States may assume responsibilites
from areawide agencies under this paragraph in accordance with section
208(b)(4)(A) of the Act.

     NOTE:  Control needs for waste disposal to protect surface and
ground water from land disposal of solid waste and from hazardous waste
are identified in programs under Subtitles C and D of the Resource
Conservation and Recovery Act (RCRA).  To avoid redundancy and incon-
sistency, the Regional Administrator and the State shall establish (through
the State/EPA Agreement) the planning and funding responsibilities
attributable to the RCRA and WQM programs.  The division of responsibilities
shall be in accordance with annual EPA guidance.

     (g)  Hater quality standards.

     State water quality standards shall be reviewed and appropriate recom-
mendations made on revising such standards to meet water quality goals.  The
State shall consider the recommendations in the review and revision of
standards.

§35.1519-7  Planning responsibilities.

     (a)  Governor.

          The Governor shall:

          (1)  Assure that adequate WQM planning consistent with this part
is conducted throughout the State to control point and nonpoint pollution to
meet water quality goals.

          (2)  Take action necessary to correct a failure in planning of a
State or areawide agency by promptly designating a replacement State or local
agency or otherwise assuring production of required planning products.
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          (3)  Promptly take action on plans in accordance with §35.1521-3.

     (b)  State.

     The State planning agency, and any other appropriate State agency
designated by the Governor, shall:

          (1)  Review and comment on proposed areawide annual  work programs
in accordance with S35.1511-3.

          (2)  Continually review development of areawide plans including
revisions and additions.

          (3)  To the maximum extent feasible, act as a resource for areawide
planning agencies, provide them with technical assistance and  information
on BMPs and pollution control technologies.

          (4)  Perform planning for nondesignated areas under  section 208
of the Act and planning for which the State is responsible in  designated
areas.  The State is responsible for timely completion of its  initial planning
responsibilities and those identified in its approved work program.

          (5)  If designated by the Governor, promptly assure  completion of
necessary additional planning in the event of failure of a designated areawide
agency.  In such an event, the former work program shall be examined and
modified as determined by agreement between the successor agency and the
Regional Administrator, consistent with the objectives of the  Act.

     (c)  Areawide agencies.

     The areawide agency shall prepare and submit an areawide  WQM plan,
including revisions and additions, and shall carry out all responsibilities
assigned to it under any grant agreement, its approved work program,  and
any agreement with the State, consistent with this part.

     (d)  Local Involvement.

     State and areawide WQM planning agencies must assure that affected
local governments are involved in WQM plan development.  Therefore,  no
grant will be awarded under this subpart to a State or areawide planning
agency unless the Regional Administrator is satisfied that adequate
provisions have been made for such local involvement (including the
participation of local elected officials).

     (e)  Failure.

     Failure to meet any of the requirements of this section may result
in withholding of all or part of grant funds available under sections
106, the nonconstruction related portion of 205(g), 208, or 314 of the
Act and disapproval of the CPP under §35.1511-2.  201 funds may be
withheld in the circumstances described in §35.1531-4(b).
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S35.1519-8  Planning on Indian lands.

     To the maximum extent feasible, States and areawide agencies shall
coordinate with Indian tribal organizations within and adjacent to their
planning areas in the development of WQM plans.  Where this is not feasible,
the Regional Administrator shall  work with the State and Indian Tribe to
ensure development of WQM planning on Indian lands.  The WQM planning area
should include all lands within the reservation regardless of ownership.
Where the State finds it cannot legally deal with an Indian tribal
organization through designation or interagency agreement, the State and
the Regional Administrator may agree to allow EPA to use a portion of
the State's 208 funds to support a cooperative agreement between EPA and
the Indian Tribe to accomplish 208 tasks on Indian land.  The State
shall review the Indian tribe's work program and work outputs for consistency
with State and adjacent areawide agency work.  Where the Governor determines
that he or she has no authority to take action on Indian tribal plans under
§35.1521, the Governor shall, at a minimum, review and comment on the plan
submission and provide his or her comments to EPA.  All WQM plans for Indian
lands shall be submitted to EPA for review and approval.

§35.1521  Evaluation, certification, and approval of WQM plans and
          designation of management agencies.

§35.1521-1  General.

     The terms "certify" and "certification" mean the finding by the Governor
that a State or areawide WQM plan meets the criteria in §35.1521-2(c).   EPA
approval constitutes the finding by the Regional Administrator that the plan
meets those criteria.  Areawide WQM plan outputs are officially incorporated
into State WQM plans upon State certification and EPA approval.  State
certification is a prerequisite for EPA approval.  Failure of the State
to take action within the time specified in §35.1521-3(a) will result in
EPA action as specified in §35.1521-3(b).

§35.1521-2  Plan evaluation.

     (a)  Review of proposed WQM plans.

     In accordance with Part 25 of this chapter, the planning agency shall
hold a public hearing on its proposed plan.  The public hearing shall be
preceded by 45 days notice.  Comments shall be solicited from the public, the
State, EPA, and agencies affected by the WQM plan.  Affected agencies include
general purpose units of local government, proposed and designated management
agencies, and other State and Federal agencies whose lands or programs are
impacted (e.g., air, solid waste, drinking water, and fish and game offices).
Copies of the proposed plan must be made available to the public and
affected agencies at a convenient location.  All comments shall be
considered.
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     (b)  Review of final  WQM plans by the State and EPA.

     Within 30 days after  the public hearing under paragraph (a)  of this
section, the planning agency shall  submit its WQM plan to  the Governor
and EPA for their concurrent review and evaluation.   In accordance with
Part 25 of this chapter, a summary  of comments received in the hearing and
elsewhere and the planning agency's response shall accompany the  submittal.

     (c)  Evaluation criteria.

     To be certified by the Governor and approved by EPA,  a WQM plan shall:

          (1)  Be consistent with work program provisions, other  relevant
portions of the State/EPA  Agreement, this subpart, and the Act;

          (2)  Be consistent with other planning and implementation
activities relevant to WQM planning provisions;

          (3)  Be technically valid;

          (4)  Be economically feasible; and

          (5)  Represent substantial progress toward achievement  of water
quality goals (see S35.1505).

     (d)  Management agency designation criteria.

     Management agencies shall satisfy requirements  of S35.1519-5(c) to be
designated by the State and accepted by EPA.

§35.1521-3  Plan certification; designation of management  agencies.

     (a)  Within 120 days  after receipt of the WQM plan for evaluation under
§35.1521-2(b), the Governor shall submit a letter to the Regional Administrator
and the planning agency containing  findings that the Governor certifies,  or does
not certify, each element of the plan.  Prior to such submission, the
Governor shall give public notification of the intended action on the WQM
plan and allow an adequate public comment period.  If there is sufficient
public interest, a public  hearing may be held in accordance with  Part 25  of
this chapter.  Plan provisions may  be certified, and management agencies  may
be designated, with conditions.  The certification letter shall be accompanied
by a summary of public participation and comments received, and the Governor's
response to those comments.  The certification letter shall specify:

          (1)  Plan provisions the  Governor certifies in accordance with
S35.1521-2(c).  Specific conditions endorsed for incorporation into NPDES
permits under section 208(e) shall  be identified.  Where provisions are
certified under this section with conditions, a schedule for completing
revisions shall be included.
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          (2)  For plan provisions the Governor does not certify, the plan
revisions necessary for certification.

          (3)  Designated management agencies for implementing certified
plan provisions.  Where such agencies are not identified, the plan revisions
necessary to obtain designation must be stated.  Where the Governor
designates a management agency which differs from the agency set forth
in the plan, he or she shall forward with the certification letter the
rationale for the selection, a summary of comments of the planning
agency on the substitution, the Governor's response to those comments, and
the commitment letter of the management agency.

     (b)  Where the Regional Administrator determines that the Governor
has failed without good cause to meet in a timely manner the certification
requirements of paragraph (a), the Regional  Administrator shall  withhold
further 208 grant awards (and appropriate portions of 106 and 205(g) grant
awards) to the State pending compliance with the requirements, and may
suspend or terminate the current 208 grant (and appropriate portions of
the 106 and nonconstruction related 205(g) grants) in accordance with
SS30.915 and 30.920 of this chapter.

S35.1521-4  EPA approval.

     (a)  Within 150 days after receipt of a WQM plan for evaluation under
§35.1521-2(b), the Regional Administrator shall take action under this
section.  Plan recommendations may be approved and designated management
agencies accepted with conditions.  The Regional Administrator shall notify
the Governor and the planning agency in writing of the following:

          (1)  Plan provisions approved and designated management agencies
accepted.  Specific conditions approved for incorporation into NPDES permits
under section 208(e) shall  be identified.  Where provisions are approved
under this section with conditions, a schedule for completion of revisions
shall be included.

          (2)  For plan recommendations disapproved and designated management
agencies not accepted, the plan revisions necessary to obtain approval and
acceptance.

     (b)  Periodically, EPA shall publish notices in the FEDERAL REGISTER
describing actions taken under this section.  Where a plan is approved with
conditions, the notice shall specify an EPA contact for more information
about the conditions.
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§35.1522  Reviewing plan applicability after approval.

     The State shall identify, with EPA approval, an agency to review
facilities plans and advise EPA concerning whether proposed treatment
works projects are in conformity with the approved WQM plan under
sections 204(a)(l) and 208(d), and whether proposed permits under
section 402 of the Act are in conflict with the plan under section 208(e)
(if the permit program has been delegated to the State).  EPA shall consider
any comments provided by this agency in making the determinations required
under sections 204(a), 208(d) and 208(e).  The agency identified for waste-
water treatment facility plan review shall be the agency which will have
responsibility (whether by designation or through delegation from a
designated agency) for the ongoing WQM planning functions related to
wastewater treatment facilities.  The identified agency shall also be
responsible for reviewing conformity of treatment works projects with
nonpoint source and other elements of the approved WQM plan.

S35.1523  Evaluation of management agency performance.

     (a)  Responsibility for evaluation of management agency performance
resides primarily with the State, which shall provide a description of its
evaluation output commitment in its work program.  States may delegate
portions of evaluation tasks to other appropriate agencies, but the State
shall remain responsible for ensuring an adequate evaluation.  The
State shall consult with the areawide planning agency when evaluating a
management agency responsible for implementing a portion of the areawide's
plan.  Results of the evaluation shall be reflected in the strategy and
subsequent work programs.

     (b)  If the Regional Administrator determines it appropriate, EPA shall
independently evaluate management agency performance.

     (c)  The State and EPA shall use the letters of commitment developed under
§35.1519-5(c) when evaluating management agency performance in implementing
responsibilities assigned under the WQM plan.

§35.1525  Change in management agency designation by States.

     Where evaluation of a management agency indicates a failure to
implement assigned responsibilities, the Governor, in consultation with
the appropriate planning agency, shall withdraw the existing designation
and propose an alternate designation in accordance with §35.1521, or take
such other action as is needed to assure implementation.  A change in
management agency designation shall require EPA acceptance.  In proposing
to change a management agency's designation, the State shall follow the
procedures under S35.1517-2(b), except that such procedures may be modified
with concurrence of the Regional Administrator.

§35.1529  Intergovernmental coordination and cooperation.
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§35.1529-1  General.

     Each agency receiving assistance under this part shall assure adequate
involvement of appropriate local, regional, State, interstate, and
Federal agencies and coordination with other planning activities of
those governments.  In accordance with the Presidential directive to
consolidate planning requirements, Federal agencies may be delegated
responsibility under interagency agreement for developing WQM plan
outputs.  WQM plans may incorporate planning products of other Federal
programs.  The Regional Administrator shall not approve any work program
unless satisfied that the applicant has procedures which will assure
coordination with, and the appropriate involvement of, other affected
public agencies, and that the proposed work is in compliance with any
applicable planning consolidation and other Federal environmental and
community development program requirements.  WQM plan development must
be consistent with any applicable basin plan approved under section 209
of the Act.

§35.1529-2  Federal responsibility.

     Federal agencies shall cooperate with and give support to State and
areawide planning agencies in the formulation and implementation of
plans for the control of point and nonpoint pollution relating to Federal
property, facilities, or activities, and land areas contiguous with
Federally-owned land, in accordance with section 313 of the Act and
Executive Order 11752.  Upon request, EPA shall assist in assuring that
cooperation and coordination are achieved among States and Federal
agencies.

§35.1529-3  Federal facility compliance.

     (a)  In accordance with section 313 of the Act and Executive Order 11752,
Federal properties, facilities, and activities shall comply with all
Federal, State, interstate, and local requirements, administrative
authority, procedures and sanctions respecting the control and abatement
of water pollution in the same manner and to the same extent as any non-
governmental entity.

     (b)  Generally, EPA will attempt to facilitate resolution of conflicts
among Federal agencies and State, interstate, or local agencies in
matters affecting the application of or compliance with a requirement for
abatement of pollution.  Where EPA determines that its efforts are or
likely will be unsuccessful, the matter shall be referred to the Office
of Management and Budget under provisions of Executive Order 11752.

§35.1531  Implementation.

§35.1531-1  General.

     The fundamental objective of all activities of State and other agencies
under this subpart shall  be to achieve the water quality goals of the Act.
Therefore, all planning shall aim at specific implementation action.


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The framework for implementation should be developed during the preparation
of WQM plans.  EPA shall not exercise any approval authority under this
part, nor award any grant, unless the Regional  Administrator is satisfied
that the action for which approval  or grant funds is sought accords with
this policy.  This policy shall also be a key element in evaluations
conducted under this part.

S35.1531-2  Funding.

     Except for subsection 208(j),  implementation activities are generally
not eligible for funding under section 208 of the Act.  In accordance
with annual EPA guidance, funds under sections  106, 201, 205(g), and 314
of the Act may be used for implementation activities under approved
water quality management plans, if  such activities are eligible for
funding under those sections.  Funding may also be available for implementing
BMPs in rural areas under section 208(j) and for certain activities of
other Federal agencies under section 304(k) of  the Act.   Under RCRA,
assistance is available to plan and implement programs to control disposal
of solid and hazardous waste.  Other Federal agencies, such as the
Department of Housing and Urban Development, may have funding available
for certain implementation activities.

S35.1531-3  Remedies for failure to implement.

     The Regional Administrator may take any appropriate action for failure
to implement, including the following:

     (a)  If the Regional Administrator determines that a State is not
implementing any portion of an approved State WQM plan,  or any portion
of an approved areawide WQM plan for which the  State has implementation
responsibility, he may withhold all or part of  funds which the State
would otherwise receive under sections 106, 205(g), 208, and 314 of the
Act.  Since the State is responsible for WQM planning throughout the
State (see §35.1519-7), the Regional Administrator may also withhold
such grant funds from the State if  he determines that:  (1) any approved
portion of an areawide plan is not  being implemented; (2) the State has
the capability to implement those portions; and (3) after reasonable
notice from the Regional Administrator to the Governor,  the State has
failed to use its best efforts to implement those portions.

     Note:  Reference to funds under Section 205(g) of the Act must be
read in light of the definition in  §35.1502(b).  The term does not
include Construction Management Assistance Grants under subpart F of
this chapter.

     (b)  The Regional Administrator, after consulting State and areawide
planning agencies, and after public notification in accordance with Part
25 of this chapter, may withdraw acceptance of a management agency
designation or approval of a planning agency designation if the agency
is not meeting its implementation responsibilities.  The State shall then
promptly designate a replacement agency under §35.1517 or S35.1525.
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Under S30.340, such a failure may provide a basis for EPA determination
that the disapproved agency is not entitled to public trust and, therefore,
is ineligible to receive funds under any EPA program.

     (c)  After fiscal year 1979, no funds under section 208 of the Act
will be available to any planning agency which developed a certified and
approved plan, unless a significant portion of the plan is being implemented,

§35.1531-4  Relationship to other programs.

     (a)  Relationship to the NPDES program.

     In accordance with section 208(e) of the Act, no NPDES permit may
be issued to any point source which is in conflict with an approved WQM
plan.  Under S35.1519-5(a), requirements for incorporation of conditions
into permits under 208(e) are identified during WQM planning.   Permit
conditions identified under section 208(e) may be superseded by applicable
more stringent NPDES permit requirements.

     (b)  Relationship to the construction grants program.

          (1)  Under sections 208(d) and 204(a)(l) of the Act, after
relevant portions of a WQM plan are approved, section 201 construction
grants may be awarded only to designated management agencies for con-
struction of treatment works in conformity with the approved WQM plan.
The State or areawide agency which the State has selected under §35.1522
shall review each facility plan in its area for consistency with the
approved WQM plan.  Facility planning shall be based on wasteload alloca-
tions, delineation of facility planning areas, and population projection
totals and disaggregations in approved WQM plans.  After October 1, 1979,
the Regional Administrator shall  not approve a grant for any municipal
treatment works under section 201  of the Act where such facility-related
information is not available in an approved WQM plan, unless the
Regional Administrator determines in writing, based on information sub-
mitted by the State or grantee, that the facility related information was
not within the scope of the WQM work program or that the award of the
201 grant is necessary to achieve water quality goals.

          (2)  Construction grant project needs and priorities established
during WQM planning shall be developed by State and areawide planning
agencies consistent with the priority system of the State under §35.915
and §35.1513-2.  In developing its annual priority list, the State shall
consider the construction grant needs and priorities set forth in certi-
fied and approved State and areawide WQM plans.

     (c)  Relationship to the rural clean water program.

     Under section 208(j) of the  Act and regulations promulgated by the
U.S. Department of Agriculture (with concurrence of the Administrator),
financial  assistance is available for installation of BMPs to control
agricultural nonpoint source pollution.
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     NOTE:  The Governor, or his or her designee, must submit proposed
projects in order of priority to the Secretary of Agriculture.  Proposed
projects are eligible if they are identified in approved portions of WQM
plans. The management agency designated to implement the program must
assure there will be an adequate level of participation in BMP implementation
in terms of the percentage of critical acreage or source of the problem
that will be controlled.  The management agency must certify that the BMPs
to be cost-shared are consistent with the approved WQM plan.

S35.1533  Public participation.

S35.1533-1  Purpose.

     The public participation goals, policies and requirements in Part
25 of this chapter apply to activities under this subpart.  The purpose
is to involve the public at appropriate implementation points and throughout
the planning process (including determination of planning goals and
objectives, identification and assessment of alternatives, evaluation of
proposed plans, and development of implementation strategies) so that
planning and implementation reflect public concerns and so that there is
public understanding and support for WQM.

S35.1533-2  Work Programs.

     State and areawide work programs shall include a public participation
element which identifies staff and budget resources; the schedule and
anticipated nature activities; key decision points for outputs where
public consultation will occur and agency responsiveness summaries will be
prepared; a description of advisory committee membership; and mechanisms
for coordinating public participation.

§35.1533-3  Planning and implementation.

     State and areawide planning agencies shall establish mechanisms to
encourage public participation in WQM plan development and implementation
in accordance with Part 25 of this chapter.  Information concerning the
nature, scope, and anticipated impact of planning alternatives under
consideration and of the proposed WQM plans shall be readily available to
the public.  Opportunities shall be provided for the public to review and
comment on proposed WQM plans in accordance with §35.1521-2.  An advisory
committee shall be established in accordance with S25.3(d)(4) of this chapter
and shall be consulted at appropriate times during WQM plan development.
Any necessary modifications to existing advisory committees to meet the
requirements of part 25 of this chapter shall be completed within 45 days
of the initial grant award under this subpart.  The advisory committee
shall have the opportunity to review and comment on the agency's annual
grant application and proposed work program.  A summary of public
participation during WQM plan development shall be forwarded to the State
and EPA when the final WQM plan is submitted under S35.1521.
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§35.1535  Allotments and reallotments.

S35.1535-1  Allotments.

     (a)  Section 106.

     Sums which the Administrator determines will be available for
outputs funded under section 106 of the Act for each fiscal year will be
allocated to State and interstate agencies on the basis of the extent of
the pollution problem.  The allotment formula, allotment ratios, and the
amounts available shall be announced in a notice in the FEDERAL REGISTER and
included in each year's annual guidance.  Interstate agency allotment ratios
are based on the level of funding received in fiscal year 1973, provided the
total sum available under section 106 is at least $40 million.

     (b)  Section 208.

     Sums which the Administrator determines will be available for
outputs funded under section 208 shall be allotted to each Region generally
on the basis of need, population, and land area of each Region.  The allotment
formula, allotment ratios, and the amounts available shall be announced
in a notice in the FEDERAL REGISTER and included in each year's annual
guidance.  Grant amounts shall be negotiated by the Regional Administrator
and each State and areawide agency in accordance with §35.1511.

     (c)  Section 205(g).

     Sums available to States under section 205(g) of the Act and
subpart E of this chapter for permit program elements under sections 402
and 404 of the Act and for statewide 208(b)(4) planning will be determined
on a case-by-case basis by the Regional Administrator.

§35.1535-2  Reallotments.

     (a)  At the end of each fiscal  year, unobligated funds available
under sections 106 and 208 of the Act shall be reissued as carryover
funds to the same Region for allocation to eligible agencies within that
Region as determined by the Regional Administrator.

     (b)  Unobligated funds under section 205(g) of the Act shall be
managed in accordance with §35.1020(e) of this chapter.

§35.1537  Grant limitations and administration.

§35.1537-1  Grant amount.

     (a)  For section 106 and 205(g) outputs.

     Each State and interstate agency shall receive a grant from its
final 106 allotment and 205(g) nonconstruction management assistance funds
in an amount not to exceed the reasonable cost of carrying out its
approved program, as determined by the Regional Administrator.
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     (b)  For section 208 outputs.

     Each State and areawide planning agency shall receive a grant
in an amount not to exceed 75% of the reasonable cost of carrying out
its approved program, as determined by the Regional Administrator.

S35.1537-2  Reduction of grant.

     (a)  Should the Regional Administrator's evaluation of the work program
proposed by a State, interstate, or areawide agency indicate that the
proposed output commitment is not consistent with -the level of funding
requested or national priorities, he or she shall negotiate with the
agency to change the output commitment or to reduce the grant amount.
However, should an agency propose a different set of outputs than suggested
in the EPA annual guidance due to unanticipated regional or statewide
pollution problems, the Regional Administrator may approve the program
provided he determines the outputs can and should be produced and the
proposed funding is appropriate.

     (b)  If a State, interstate or areawide agency fails to submit its
work program by the dates specified in S35.1507-7, the grant amount may
be reduced by an appropriate amount reflecting the significance of the
delay in relation to accomplishment of the proposed program.

     (c)  Funds recovered under this section shall be available for
allocation by the Regional Administrator to other agencies within the
Region.

S35.1537-3  Budget Period.

     The budget period shall be for the Federal fiscal year.

S35.1537-4  Eligibility.

     (a)  Section 106.

     Grants may be awarded to a State or interstate water pollution control
agency provided the agency has submitted a work program which satisfied
the requirements of this subpart and is approved by the Regional
Administrator.

     (b)  Section 208.

          (1)  Statewide 208 planning grants for non-designated areas may
be awarded to the State agency identified in the approved work program.

          (2)  Areawide planning agencies shall be eligible for grant
awards under these provisions only if it:
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          (i)  is designated by the Governor under 208(a) and approved by
the Regional Administrator as the official planning agency for the
areas;

         (ii)  agrees to develop or revise a 208 water quality
management plan in accordance with an approved work program; and

        (iii)  is deemed likely to be successful in its efforts by the
Regional Administrator who shall take into account in making this
determination the past efforts of the agency, evaluations, and comments of
the Governor and the public.

S35.1537-5  Limitations on Award.

     (a)  No funds under section 106 of the Act shall be awarded to any
State or interstate agency for any fiscal year unless the agency has
certified (and the Regional Administrator agrees) that its expenditures
of non-Federal funds during that fiscal year for its recurrent 106 program
expenditures will be not less than such expenditures during the fiscal
year ending June 30, 1971, or the last year of Federal support if such
Federal support was initiated subsequent to the fiscal year ending June 30,
1971.

     (b)  If a State has received a construction management assistance
grant under section 205(g) of the Act, the provisions of S35.1016(a) of this
chapter determine the maintenance of effort level, but in no case shall a
State reduce its expenditures below the amount required in paragraph (a)
of this section.

     (c)  No funds under section 208 of the Act shall be awarded to a
designated planning agency where previous planning by that agency for
the same water quality problem was not certified by the State or was
disapproved by EPA.

     (d)  No funds under section 106 of the Act shall be awarded to any
State which has not provided or is not carrying out as part of its
program:  (1) the establishment and operation of appropriate devices,
methods, systems, and procedures necessary to monitor, and to compile
and analyze data on (including classification according to eutrophic
condition) the quality of navigable waters and to the extent practicable,
ground waters including biological monitoring; and provision for annually
updating such data and including it in the report required under section
305(b) of the Act.  (§35.1570 sets forth the minimum requirements for an
acceptable monitoring strategy under the Act.)   (2) authority comparable
to that in section 504 of the Act, "Emergency Powers", and adequate
contingency plans to implement the authority, in accordance with EPA guidance.

     (e)  No grant shall be awarded for any activity which the Regional
Administrator determines is not in conformity with an approved State
Implementation Plan under the Clean Air Act.
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     (f)  No funds under section 106 of the Act shall be awarded to a
State unless the Regional Administrator determines that the level of
funding for legal expenses related to enforcement activities is adequate
(including funding for expenses of the State's attorney general or
equivalent office, where the Regional Administrator determines such
funding to be appropriate).

          (g)  No funds under section 106 of the Act shall  be awarded to
any State or interstate agency with respect to which there is in effect
any Federally assumed enforcement under section 309(a)(2) of the Act.

S35.1537-6  Allowable and unallowable costs.

     Allowable and unallowable costs under sections 106, 208, and 205(g)
shall be determined by the Regional Administrator in accordance with
S30.705 of this chapter if he or she determines that the costs are
reasonable for carrying out approved activities.  Costs related to the
following activities shall be unallowable:

     (a)  Costs incurred in sewer evaluation surveys as required under
S35.927-2 of this chapter;

     (b)  Costs incurred in detailed sewer system mapping and related
surveys;

     (c)  Costs related to sewage collection systems;

     (d)  Cost of special studies for the specific benefit of individual,
industrial or commercial establishments; and

     (e)  Costs of activities which are primarily of a research nature.

S35.1537-7  Audit.

     State or other agencies which receive funds under more than one
paragraph of S35.1535-1 shall develop outputs for the expenditure of
those funds in such a manner as to assure the funds are used for permissable
tasks and to permit accountability to each appropriation.  However,
commonly funded outputs serving more than one program shall be used where
feasible.  Generally, the audit shall be conducted only back to the
approved work program.  The Regional Administrator may establish procedures
in the State/EPA Agreement for accepting State audit results in lieu of
EPA audit.

S35.1537-8  Adherence to budget estimates

     Grant expenditures shall be consistent with the resource estimates
contained in the approved work program.  If rebudgeting of funds among
program elements becomes necessary, the provisions of S30.610 of this
chapter shall be applied.
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§35.1537-9  Program changes.

     The grantee shall conduct its activities in a manner consistent with
the approved work program.  If budget changes to the approved State program
become necessary, the provisions of S30.610 of this chapter shall be applied.

§35.1537-10  Payment.

     Grant payments shall be made in accordance with §30.615 of this chapter.
Notwithstanding the provisions of §30.345 of this chapter, the first grant
payment subsequent to grant award may include reimbursement of all allowable
costs incurred from the beginning of the approved budget period, provided
that monthly costs incurred from the beginning of the budget period to
the date of grant award do not exceed the level  of costs approved by the
Regional Administrator as reasonable.

§35.1537-11  Financial status report.

     Within 90 days after the end of each budget period, the grantee shall
submit to the Regional Administrator an annual report of all expenditures
(Federal and non-Federal) which accrued during the budget period.  Beginning
in the second quarter of any succeeding budget period, grant payments may
be withheld under §30.615-3 of this chapter until this report is received.

§35.1537-12  Disputes under this subpart.

     Final determinations of the Regional Administrator concerning refusal
to award grant funds and termination or suspension of grants, and final
determinations of the Regional Administrator concerning disputes as to
allowable costs or other matters arising under a grant, shall be, final
and conclusive unless appealed by the applicant or grantee in writing within
30 days from the date of receipt of such final determination.  Procedures
and further requirements are set forth in the "Disputes" provisions of
Part 30, subpart J of this subchapter.

Appendix A - Water quality and pollutant source monitoring.

     [Remains the same.  See Appendix A, subpart B, Part 35]
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