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into a regulatory program, and S. 1081 identifies nonpoint sources as an area for increased attention.'- CURRENT ISSUES Some of the more important areas of conflict between state water allocation systems and the Clean Water Act,/ as it exists or under proposed amendments, include the following: 1. Water Quality Standards Water quality standards are arguably relevant now for new water projects, as a part of the 401 certification for 404 permits, and will probably be directly applied in the future to all water projects under a nonpoint source regulatory program. The substantive content of the standards is therefore very important. EPA has promulgated its "Guidance on Biological Criteria," which is to be implemented by the states as a part of state water quality standards to achieve "ecological integrity," as measured by reference to a pristine stream (also known as the "happy fish test"). EPA's current position is that states must develop biological criteria in the 1991-1993, triennium, and implement them in the following triennium. This definition of water quality can then be used by EPA to assert that any act which reduces or impairs naturally occurring aquatic habitat is a violation of water quality standards, which would include the diversion of water under a state water right. Perhaps because EPA may not have the legal authority under the existing CWA to require states to adopt Biological Criteria, S. 1081 explicitly states that the purpose of the CWA is to achieve "ecological integrity" and the."protection and propagation of a balanced, 7/ There may be additional amendments to S. 1081 to strengthen. the nonpoint program, perhaps by including a cross- compliance requirement or by.adding a program modeled on the Coastal Zone Management Act. Cross-compliance is the imposition of a requirement by making compliance a requirement of another federal permit or grant program. The CZMA is essentially a federally supervised and state- implemented land use regulatory program. 8/ The classic water quality/quantity conflict is presented by a diversion which would withdraw water from the stream (without any discharge of pollutants) and therefore cause the downstream concentration of pollutants from others sources. While it is clear that diversions can result in an adverse impact to downstream water quality, there is an intense debate over the extent to which these impacts may be regulated under the existing Clean Water Act. A closer question is presented by dam-induced water quality changes, and the Gorsuch decision merely held that they are not covered by the point source permitting requirements of Section 402. r kk