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[House Report 110-33]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     110-33

======================================================================
 
        APPALACHIAN REGIONAL DEVELOPMENT ACT AMENDMENTS OF 2007

                                _______
                                

 March 6, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Oberstar, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 799]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 799) to reauthorize and improve the 
program authorized by the Appalachian Regional Development Act 
of 1965, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Appalachian Regional Development Act 
Amendments of 2007''.

SEC. 2. LIMITATION ON AVAILABLE AMOUNTS; MAXIMUM COMMISSION 
                    CONTRIBUTION.

  (a) Grants and Other Assistance.--Section 14321(a) of title 40, 
United States Code, is amended--
          (1) by striking paragraph (1)(A)(i) and inserting the 
        following:
                          ``(i) the amount of the grant shall not 
                        exceed--
                                  ``(I) 50 percent of administrative 
                                expenses;
                                  ``(II) at the discretion of the 
                                Commission, if the grant is to a local 
                                development district that has a charter 
                                or authority that includes the economic 
                                development of a county or a part of a 
                                county for which a distressed county 
                                designation is in effect under section 
                                14526, 75 percent of administrative 
                                expenses; or
                                  ``(III) at the discretion of the 
                                Commission, if the grant is to a local 
                                development district that has a charter 
                                or authority that includes the economic 
                                development of a county or a part of a 
                                county for which an at-risk county 
                                designation is in effect under section 
                                14526, 70 percent of administrative 
                                expenses;''; and
          (2) by striking paragraph (2)(A) and inserting the following:
                  ``(A) In general.--Except as provided in subparagraph 
                (B), of the cost of any activity eligible for financial 
                assistance under this section, not more than--
                          ``(i) 50 percent may be provided from amounts 
                        appropriated to carry out this subtitle;
                          ``(ii) in the case of a project to be carried 
                        out in a county for which a distressed county 
                        designation is in effect under section 14526, 
                        80 percent may be provided from amounts 
                        appropriated to carry out this subtitle; or
                          ``(iii) in the case of a project to be 
                        carried out in a county for which an at-risk 
                        county designation is in effect under section 
                        14526, 70 percent may be provided from amounts 
                        appropriated to carry out this subtitle.''.
  (b) Demonstration Health Projects.--Section 14502 of title 40, United 
States Code, is amended--
          (1) by striking subsection (d)(2) and inserting the 
        following:
          ``(2) Limitation on available amounts.--Grants under this 
        section for the operation (including initial operating amounts 
        and operating deficits, which include the cost of attracting, 
        training, and retaining qualified personnel) of a demonstration 
        health project, whether or not constructed with amounts 
        authorized by this section, may be made for up to--
                  ``(A) 50 percent of the cost of that operation;
                  ``(B) in the case of a project to be carried out in a 
                county for which a distressed county designation is in 
                effect under section 14526, 80 percent of the cost of 
                that operation; or
                  ``(C) in the case of a project to be carried out for 
                a county for which an at-risk county designation is in 
                effect under section 14526, 70 percent of the cost of 
                that operation.''; and
          (2) in subsection (f)--
                  (A) in paragraph (1) by striking ``paragraph (2)'' 
                and inserting ``paragraphs (2) and (3)''; and
                  (B) by adding at the end the following:
          ``(3) At-risk counties.--The maximum Commission contribution 
        for a project to be carried out in a county for which an at-
        risk county designation is in effect under section 14526 may be 
        increased to the lesser of--
                  ``(A) 70 percent; or
                  ``(B) the maximum Federal contribution percentage 
                authorized by this section.''.
  (c) Assistance for Proposed Low- and Middle-Income Housing 
Projects.--Section 14503 of title 40, United States Code, is amended--
          (1) by striking subsection (d)(1) and inserting the 
        following:
          ``(1) Limitation on available amounts.--A loan under 
        subsection (b) for the cost of planning and obtaining financing 
        (including the cost of preliminary surveys and analyses of 
        market needs, preliminary site engineering and architectural 
        fees, site options, application and mortgage commitment fees, 
        legal fees, and construction loan fees and discounts) of a 
        project described in that subsection may be made for up to--
                  ``(A) 50 percent of that cost;
                  ``(B) in the case of a project to be carried out in a 
                county for which a distressed county designation is in 
                effect under section 14526, 80 percent of that cost; or
                  ``(C) in the case of a project to be carried out for 
                a county for which an at-risk county designation is in 
                effect under section 14526, 70 percent of that cost.''; 
                and
          (2) by striking subsection (e)(1) and inserting the 
        following:
          ``(1) In general.--A grant under this section for expenses 
        incidental to planning and obtaining financing for a project 
        under this section that the Secretary considers to be 
        unrecoverable from the proceeds of a permanent loan made to 
        finance the project shall--
                  ``(A) not be made to an organization established for 
                profit; and
                  ``(B) except as provided in paragraph (2), not 
                exceed--
                          ``(i) 50 percent of those expenses;
                          ``(ii) in the case of a project to be carried 
                        out in a county for which a distressed county 
                        designation is in effect under section 14526, 
                        80 percent of those expenses; or
                          ``(iii) in the case of a project to be 
                        carried out in a county for which an at-risk 
                        county designation is in effect under section 
                        14526, 70 percent of those expenses.''.
  (d) Telecommunications and Technology Initiative.--Section 14504 of 
title 40, United States Code, is amended by striking subsection (b) and 
inserting the following:
  ``(b) Limitation on Available Amounts.--Of the cost of any activity 
eligible for a grant under this section, not more than--
          ``(1) 50 percent may be provided from amounts appropriated to 
        carry out this section;
          ``(2) in the case of a project to be carried out in a county 
        for which a distressed county designation is in effect under 
        section 14526, 80 percent may be provided from amounts 
        appropriated to carry out this section; or
          ``(3) in the case of a project to be carried out in a county 
        for which an at-risk county designation is in effect under 
        section 14526, 70 percent may be provided from amounts 
        appropriated to carry out this section.''.
  (e) Entrepreneurship Initiative.--Section 14505 of title 40, United 
States Code, is amended by striking subsection (c) and inserting the 
following:
  ``(c) Limitation on Available Amounts.--Of the cost of any activity 
eligible for a grant under this section, not more than--
          ``(1) 50 percent may be provided from amounts appropriated to 
        carry out this section;
          ``(2) in the case of a project to be carried out in a county 
        for which a distressed county designation is in effect under 
        section 14526, 80 percent may be provided from amounts 
        appropriated to carry out this section; or
          ``(3) in the case of a project to be carried out in a county 
        for which an at-risk county designation is in effect under 
        section 14526, 70 percent may be provided from amounts 
        appropriated to carry out this section.''.
  (f) Regional Skills Partnerships.--Section 14506 of title 40, United 
States Code, is amended by striking subsection (d) and inserting the 
following:
  ``(d) Limitation on Available Amounts.--Of the cost of any activity 
eligible for a grant under this section, not more than--
          ``(1) 50 percent may be provided from amounts appropriated to 
        carry out this section;
          ``(2) in the case of a project to be carried out in a county 
        for which a distressed county designation is in effect under 
        section 14526, 80 percent may be provided from amounts 
        appropriated to carry out this section; or
          ``(3) in the case of a project to be carried out in a county 
        for which an at-risk county designation is in effect under 
        section 14526, 70 percent may be provided from amounts 
        appropriated to carry out this section.''.
  (g) Supplements to Federal Grant Programs.--Section 14507(g) of title 
40, United States Code, is amended--
          (1) in paragraph (1) by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (3)''; and
          (2) by adding at the end the following:
          ``(3) At-risk counties.--The maximum Commission contribution 
        for a project to be carried out in a county for which an at-
        risk county designation is in effect under section 14526 may be 
        increased to 70 percent.''.

SEC. 3. ECONOMIC AND ENERGY DEVELOPMENT INITIATIVE.

  (a) In General.--Subchapter I of chapter 145 of subtitle IV of title 
40, United States Code, is amended by adding at the end the following:

Sec. 14508. Economic and energy development initiative

  ``(a) Projects To Be Assisted.--The Appalachian Regional Commission 
may provide technical assistance, make grants, enter into contracts, or 
otherwise provide amounts to persons or entities in the Appalachian 
region for projects--
          ``(1) to promote energy efficiency in the region to enhance 
        its economic competitiveness;
          ``(2) to increase the use of renewable energy resources in 
        the region to produce alternative transportation fuels, 
        electricity, and heat; and
          ``(3) to support the development of conventional energy 
        resources in the region to produce alternative transportation 
        fuels, electricity, and heat.
  ``(b) Limitation on Available Amounts.--Of the cost of any project 
eligible for a grant under this section, not more than--
          ``(1) 50 percent may be provided from amounts appropriated to 
        carry out this section;
          ``(2) in the case of a project to be carried out in a county 
        for which a distressed county designation is in effect under 
        section 14526, 80 percent may be provided from amounts 
        appropriated to carry out this section; or
          ``(3) in the case of a project to be carried out in a county 
        for which an at-risk county designation is in effect under 
        section 14526, 70 percent may be provided from amounts 
        appropriated to carry out this section.
  ``(c) Sources of Assistance.--Assistance under this section may be 
provided from amounts made available to carry out this section in 
combination with amounts made available under other Federal programs or 
from any other source.
  ``(d) Federal Share.--Notwithstanding any provision of law limiting 
the Federal share under any other Federal program, amounts made 
available to carry out this section may be used to increase that 
Federal share, as the Commission decides is appropriate.''.
  (b) Conforming Amendment.--The analysis for chapter 145 of title 40, 
United States Code, is amended by inserting after the item relating to 
section 14507 the following:

``14508. Economic and energy development initiative.''.

SEC. 4. DISTRESSED, AT-RISK, AND ECONOMICALLY STRONG COUNTIES.

  (a) Designation of At-Risk Counties.--Section 14526 of title 40, 
United States Code, is amended--
          (1) in the section heading by inserting ``, at-risk,'' after 
        ``Distressed''; and
          (2) in subsection (a)(1)--
                  (A) by redesignating subparagraph (B) as subparagraph 
                (C);
                  (B) in subparagraph (A) by striking ``and'' at the 
                end; and
                  (C) by inserting after subparagraph (A) the 
                following:
                  ``(B) designate as `at-risk counties' those counties 
                in the Appalachian region that are most at risk of 
                becoming economically distressed; and''.
  (b) Conforming Amendment.--The analysis for chapter 145 of such title 
is amended by striking the item relating to section 14526 and inserting 
the following:

``14526. Distressed, at-risk, and economically strong counties.''.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

  (a) In General.--Section 14703(a) of title 40, United States Code, is 
amended to read as follows:
  ``(a) In General.--In addition to amounts made available under 
section 14501, there is authorized to be appropriated to the 
Appalachian Regional Commission to carry out this subtitle (other than 
section 14508)--
          ``(1) $65,000,000 for fiscal year 2007;
          ``(2) $80,000,000 for fiscal year 2008;
          ``(3) $85,000,000 for fiscal year 2009;
          ``(4) $90,000,000 for fiscal year 2010; and
          ``(5) $95,000,000 for fiscal year 2011.''.
  (b) Authorization of Appropriations.--Section 14703(b) of such title 
is amended to read as follows:
  ``(b) Economic and Energy Development Initiative.--In addition to 
amounts made available under section 14501, there is authorized to be 
appropriated to the Commission to carry out section 14508 $12,000,000 
for each of fiscal years 2008 through 2011.''.
  (c) Availability.--Section 14703(c) of such title is amended by 
striking ``subsection (a)'' and inserting ``subsections (a) and (b)''.
  (d) Allocation of Funds.--Section 14703 of such title is amended by 
adding at the end the following:
  ``(d) Allocation of Funds.--Funds approved by the Commission for a 
project in a State in the Appalachian region pursuant to congressional 
direction shall be derived from such State's portion of the 
Commission's allocation of appropriated amounts among the States.''.

SEC. 6. TERMINATION.

  Section 14704 of title 40, United States Code, is amended by striking 
``2006'' and inserting ``2011''.

                       Purpose of the Legislation

    H.R. 799, the Appalachian Regional Development Act 
Amendments of 2007, is a bill to reauthorize and improve the 
programs authorized by the Appalachian Regional Development Act 
of 1965. H.R. 799 authorizes appropriations for the Appalachian 
Regional Commission programs for five years.

                  Background and Need for Legislation

    The Appalachian Regional Development Act of 1965 (ARDA) 
established the Appalachian Regional Commission (ARC). The ARC 
is a regional economic development agency representing a unique 
and precedent-setting partnership of Federal, State, and local 
government. ARC includes all or part of 13 States: Alabama, 
Georgia, Kentucky, Mississippi, New York, North Carolina, Ohio, 
Pennsylvania, South Carolina, Tennessee, Virginia, and West 
Virginia. ARC's primary function is to support development of 
Appalachia's economy and critical infrastructure to provide a 
climate for growth in business and industry that will create 
jobs. ARC administers a variety of programs to aid in the 
development and advancement of the region including the 
creation a highway system, enhancements in education and job 
training, and the development of water and sewer systems.
    Since its creation in 1965, ARC's funding and projects have 
contributed significantly to employment, health, public works, 
and general economic development improvements in the region. 
The regional poverty rate has been reduced by almost one-half. 
High school graduation rates have doubled, and the percentage 
of Appalachian students now completing high school is slightly 
above the national average. The infant mortality rate has been 
cut by two-thirds, and ARC funds have helped build more than 
400 health facilities serving four million Appalachians. ARC 
projects have provided more than 800,000 Appalachians with 
access to clean water and sanitation facilities.
    Building its successful strategy on a regional approach, 
ARC States work cooperatively with the Federal ARC co-chair to 
address issues of economic development particular to the 
Appalachian region. ARC programs do not duplicate other Federal 
programs, but respond to locally identified needs and are 
extremely flexible in their ability to quickly respond to 
unique problems of the Appalachian region.
    H.R. 799 reauthorizes the ARC for five years, from fiscal 
year 2007 through fiscal year 2011.

                       Summary of the Legislation

Section 1. Short title

    Section 1 states that this Act may be cited as the 
``Appalachian Regional Development Act Amendments of 2007''.

Section 2. Limitation on available amounts; Maximum commission 
        contribution

    Section 2(a)(1) amends section 14321(a)(1)(A) of Title 40, 
United States Code, by striking paragraph (1)(A)(i) and 
inserting the following: the amount of the grant shall not 
exceed 50 percent of administrative expenses; at the discretion 
of the Commission, if the grant is to a local development 
district that has a charter or authority that includes the 
economic development of a county or part of a county for which 
a distressed county designation is in effect, 75 percent of 
administrative expenses; or, at the discretion of the 
Commission, if the grant is to a local development district 
that has a charter or authority that includes the economic 
development of a county or a part of a county for which an at-
risk county designation is in effect, 70 percent of 
administrative expenses.
    Section 2(a)(2) amends section 14321(a)(2)(A) of Title 40, 
United States Code, by adding a provision which authorizes the 
Commission, at its discretion, to make grants for 70 percent 
for any activity eligible for financial assistance to a 
designated at-risk county.
    Section 2(b) amends section 14502 of Title 40, United 
States Code, by striking subsection (d)(2) and inserting a new 
subsection (d)(2). The new subsection authorizes the Commission 
to make grants for the operation (including initial operating 
amounts and operating deficits, which include the cost of 
attracting, training, and retaining qualified personnel) of a 
demonstration health project, whether or not constructed with 
amounts authorized by this section. The grant amounts may be 
made for up to 50 percent, or 80 percent in the case of a 
project to be carried out in a county which is a designated 
distressed county, or 70 percent for a designated at-risk 
county. Subsection (f) of section 14502 is amended by adjusting 
the maximum commission contribution for an at-risk county to 
the lesser of 70 percent or the maximum Federal contribution 
percentage authorized by this section.
    Section 2(c) amends section 14503 of Title 40, United 
States Code, by striking subsection (d)(1) and inserting a new 
subsection (d)(1). The new subsection authorizes the Commission 
to make loans for the cost of planning and obtaining financing 
(including the cost of preliminary surveys and analyses of 
market needs, preliminary site engineering and architectural 
fees, site options, application and mortgage commitment fees, 
legal fees, and construction loan fees and discounts) of up to 
50 percent of the cost, 80 percent of the cost in a designated 
distressed county, and up to 70 percent of the cost for a 
designated at-risk county.
    Section 2(c) further amends section 14503(e)(1) by striking 
the existing provision and by inserting a new provision that 
states a grant under this section for expenses incidental to 
planning and obtaining financing for a project under this 
section that the Secretary considers to be unrecoverable from 
the proceeds of a permanent loan made to finance the project 
shall not be made to an organization established for profit, 
and shall not exceed 50 percent, 80 percent in a designated 
distressed county, or 70 percent of those expenses in a 
designated at-risk county.
    Section 2(d) amends section 14504(b) of Title 40, United 
States Code, by striking subsection (b) and inserting a new 
subsection (b) to authorize the Commission to make grants for 
the costs of any activity eligible under this section of not 
more than 50 percent, 80 percent for a designated distressed 
county, or 70 percent for a designated at-risk county.
    Section 2(e) amends section 14505 of Title 40, United 
States Code, by striking subsection (c) and inserting a new 
subsection (c). The new subsection authorizes the Commission to 
make grants for the costs of any activity under this section of 
not more than 50 percent may be provided from amounts 
appropriated to carry out this section; in the case of a 
project to be carried out in a county for which a distressed 
county designation is in effect under section 14526, 80 percent 
may be provided from amounts appropriated to carry out this 
section; or in the case of a project to be carried out in a 
county for which an at-risk designation is in effect to under 
section 14526, 70 percent may be provide from amounts 
appropriated to carry out this section.
    Section 2(f) amends section 14506 of Title 40, United 
States Code, by striking subsection (d) by adding a new 
subsection (d). The new subsection authorizes the Commission to 
make grants for the costs of any activity eligible under this 
subsection of not more than 50 percent, 80 percent for a 
designated distressed county, or 70 percent grant amount for a 
designated at-risk county.
    Section 2(g) amends section 14507(g) of Title 40, United 
States Code, by adding a new subsection (g)(3). The new 
subsection states that the maximum Commission contribution for 
a project to be carried out in an at-risk county may be 
increased to 70 percent.

Section 3. Economic and energy development initiative

    This section adds section 14508 of Title 40, United States 
Code, and authorizes the Commission to provide technical 
assistance, make grants, enter into contracts, or to otherwise 
provide amounts to person or entities in the Appalachian region 
for projects to promote energy efficiency in the region; to 
increase the use of renewable energy resources in the region to 
productive alternative transportation fuels, electricity, and 
heat; and to support the development of conventional energy 
resources in the region to produce alternative transportation 
fuels, electricity, and heat. Further, this new section sets a 
limitation of available amounts to not more than 50 percent, 80 
percent for a designated distressed county, or 70 percent for a 
designated at-risk county to be provided from amounts 
appropriated to carry out the section.

Section 4. Distressed, at-risk, and economically strong counties

    Section 4(a) amends section 14526 of title 40, United 
States Code by inserting ``at-risk'' after ``distressed''. This 
section also adds the definition of ``at-risk counties'' as 
those counties in the Appalachian region that are most at risk 
of becoming economically distressed.

Section 5. Authorization of appropriations

    Section 5(a) amends section 14703(a) of Title 40, United 
States Code, to authorize appropriations for the ARC for five 
fiscal years as follows: $65 million for fiscal year 2007, $80 
million for fiscal year 2008; $85 million for fiscal year 2009; 
$90 million for fiscal year 2010, and $95 million for fiscal 
year 2011.
    Section 5(b) and (c) amend section 14703(b) of Title 40, 
United States Code, to authorize appropriations for the 
economic and energy development initiative as follows: $12 
million for each of fiscal years 2008 through 2011. These 
amounts are in addition to the amounts provided under 
subsection (a).
    Section 5(d) amends section 14703 of Title 40, United 
States Code, to add subsection (d). Subsection (d) provides 
that funds approved by the Commission for a project in a State 
pursuant to congressional direction will be derived from such 
State's portion of the Commission's allocation of appropriated 
amounts among the States.

Section 6. Termination

    Section 6 extends the termination date of the ARC from 2006 
to 2011.

            Legislative History and Committee Consideration

    During the 107th Congress, Congress enacted the Appalachian 
Regional Development Reauthorization Act of 2001 (P.L. 107-
149), which built upon past successes of the Appalachian 
Regional Commission, made several amendments to existing law, 
and extended the authorization for an additional five years. 
Specifically, the Appalachian Regional Development 
Reauthorization Act expanded the Commission by adding four new, 
adjacent counties to the region, required the Commission to 
direct at least one-half of its grant funding to activities and 
projects in distressed counties, established a program to 
provide enhanced access to telecommunications and technology to 
the region, and lowered the cost-sharing amount for distressed 
counties.
    ARC's current authorization expired in FY 2006. During the 
109th Congress, the Committee leadership introduced H.R. 5812, 
a bill reauthorizing ARC through FY 2011. In addition, on July 
12, 2006, the Subcommittee held a legislative hearing to assess 
the progress of ARC's programs in preparation for the 
reauthorization, and to examine legislative proposals that 
would create additional regional economic development 
authorities, including the Northeast Regional Development 
Commission, the Southeast Crescent Authority, and the Southwest 
Regional Border Authority. No further action was taken on H.R. 
5812.
    On February 6, 2007, the Economic Development, Public 
Buildings, and Emergency Management Subcommittee met in open 
session and recommended H.R. 799 favorably to the Committee on 
Transportation and Infrastructure by voice vote.
    On February 7, 2007, the Committee on Transportation and 
Infrastructure met in open session and adopted by voice vote an 
amendment to authorize an economic and energy development 
initiative in Appalachia. The Committee on Transportation and 
Infrastructure ordered H.R. 799, as amended, reported favorably 
to the House by voice vote.

                              Record Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each record vote on a motion to 
report and on any amendment offered to the measure or matter, 
and the names of those members voting for and against. There 
were no recorded votes taken in connection with ordering H.R. 
799 reported. A motion to order H.R. 799, as amended, reported 
favorably to the House was agreed to by voice vote with a 
quorum present.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(I) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included in the report.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
performance goals and objective of this legislation are to 
reauthorize and improve the programs authorized by the 
Appalachian Regional Development Act of 1965. H.R. 799 
authorizes appropriations for the Appalachian Regional 
Commission programs for five years.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the enclosed cost estimate for H.R. 799 
from the Director of the Congressional Budget Office.
                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 13, 2007.
Hon. James L. Oberstar,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC,
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 799, the 
Appalachian Regional Development Act Amendments of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Daniel 
Hoople (for federal costs), and Melissa Merrell (for the state 
and local impact).
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.

H.R. 799--Appalachian Regional Development Act Amendments of 2007

    Summary: H.R. 799 would authorize the appropriation of $65 
million for the Appalachian Regional Commission (ARC) for 2007. 
(The commission is currently funded at an annual rate of $35 
million in Public Law 109-383, a joint resolution making 
further continuing appropriations for fiscal year 2007.) The 
bill also would authorize $398 million over the 2008-2011 
period for the ARC to make grants to state and local 
governments that support economic development within the 
Appalachian region. CBO estimates that implementing H.R. 799 
would cost $280 million over the 2007-2012 period.
    H.R. 799 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budget impact of H.R. 799 is shown in the following table. The 
costs of this legislation fall within budget function 450 
(community and regional development). For this estimate, CBO 
assumes that the bill will be enacted in fiscal year 2007 and 
that the amounts authorized by the bill will be appropriated 
for each fiscal year.

----------------------------------------------------------------------------------------------------------------
                                                            By fiscal year, in millions of dollars--
                                               -----------------------------------------------------------------
                                                   2007       2008       2009       2010       2011       2012
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for the Appalachian
 Regional Commission \1\:
    Budget Authority..........................         35          0          0          0          0          0
    Estimated Outlays.........................         64         54         37         21         12          4
Proposed Changes:
    Economic Development Grants:
        Authorization Level...................         30         80         85         90         95          0
        Estimated Outlays.....................          3         14         33         55         71         73
    Energy Grants:
        Authorization Level...................          0         12         12         12         12          0
        Estimated Outlays.....................          0          1          4          7          9         10
    Total:
        Authorization Level...................         30         92         97        102        107          0
        Estimated Outlays.....................          3         15         37         62         80         83
Spending Under H.R. 799 for the Appalachian
 Regional Commission:
    Authorization Level.......................         65         92         97        102        107          0
    Estimated Outlays.........................         67         69         74         83         92        87
----------------------------------------------------------------------------------------------------------------
\1\ The 2007 level is the amount provided under the current continuing resolution (Public Law 109-383). A full-
  year appropriation for this agency has not yet been enacted for fiscal year 2007. H.R. 799 would authorize the
  appropriation of $65 million for 2007.

    Basis of estimate: H.R. 799 would authorize the 
appropriation of $65 million in fiscal year 2007 for the ARC to 
make grants to the 13 states of the Appalachian region. The ARC 
is currently funded at an annual rate of $35 million for fiscal 
year 2007 under the continuing resolution (Public Law 109-383) 
in effect through February 15. Thus, enacting this legislation 
would authorize the appropriation of an additional $30 million 
to the ARC in 2007.
    H.R. 799 also would authorize the appropriation of $350 
million over the 2008-2011 period for the ARC and would 
increase the maximum percentage of funds available for projects 
within counties determined to be the most at risk of becoming 
economically distressed. In addition, H.R. 799 would authorize 
the appropriation of $48 million over the 2008-2011 period for 
the ARC to establish a grant program promoting energy 
efficiency and increased use of renewable energy resources and 
alternative fuels in the Appalachian region. Based on 
historical spending patterns, CBO estimates that implementing 
H.R. 799 would cost $3 million in 2007 and $280 million over 
the 2007-2012 period, assuming appropriation of the authorized 
sums.
    Intergovernmental and private-sector impact: H.R. 799 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Assuming the appropriation of the authorized 
amounts, counties in the Appalachian region would receive more 
than $380 million over the next several years for a variety of 
grant programs. In addition, this bill would increase the 
funding available to certain counties that are at risk of 
becoming economically distressed. Any costs to those 
governments would be incurred voluntarily as conditions of 
receiving federal assistance. This bill would not affect the 
budgets of other state, local, or tribal governments.
    Estimate prepared by: Federal Costs: Daniel Hoople. Impact 
on state, local, and tribal governments: Melissa Merrell. 
Impact on the private sector: Craig Cammarata.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                     Compliance With House Rule XXI

    Pursuant to clause 9 of rule XXI of the Rules of the House 
of Representatives, H.R. 799 does not contain any congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9(d), 9(e), or 9(f) of rule XXI of the Rules 
of the House of Representatives.

                   Constitutional Authority Statement

    Pursuant to clause (3)(d)(1) of rule XIII of the Rules of 
the House of Representatives, committee reports on a bill or 
joint resolution of a public character shall include a 
statement citing the specific powers granted to the Congress in 
the Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local, 
or tribal law. The Committee states that H.R. 799 does not 
preempt any state, local, or tribal law.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 40, UNITED STATES CODE

           *       *       *       *       *       *       *

SUBTITLE IV--APPALACHIAN REGIONAL DEVELOPMENT

           *       *       *       *       *       *       *

CHAPTER 143--APPALACHIAN REGIONAL COMMISSION

           *       *       *       *       *       *       *

                  SUBCHAPTER II--FINANCIAL ASSISTANCE

Sec. 14321. Grants and other assistance

  (a) Authorization To Make Grants.--
          (1) In general.--The Appalachian Regional Commission 
        may make grants--
                  (A) for administrative expenses, including 
                the development of areawide plans or action 
                programs and technical assistance activities, 
                of local development districts, but--
                          [(i) the amount of a grant shall not 
                        exceed 50 percent of administrative 
                        expenses or, at the discretion of the 
                        Commission, 75 percent of 
                        administrative expenses if the grant is 
                        to a local development district that 
                        has a charter or authority that 
                        includes the economic development of a 
                        county or part of a county for which a 
                        distressed county designation is in 
                        effect under section 14526 of this 
                        title;]
                          (i) the amount of the grant shall not 
                        exceed--
                                  (I) 50 percent of 
                                administrative expenses;
                                  (II) at the discretion of the 
                                Commission, if the grant is to 
                                a local development district 
                                that has a charter or authority 
                                that includes the economic 
                                development of a county or a 
                                part of a county for which a 
                                distressed county designation 
                                is in effect under section 
                                14526, 75 percent of 
                                administrative expenses; or
                                  (III) at the discretion of 
                                the Commission, if the grant is 
                                to a local development district 
                                that has a charter or authority 
                                that includes the economic 
                                development of a county or a 
                                part of a county for which an 
                                at-risk county designation is 
                                in effect under section 14526, 
                                70 percent of administrative 
                                expenses;

           *       *       *       *       *       *       *

          (2) Limitation on available amounts.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), not more than 50 percent (or 
                80 percent in the case of a project to be 
                carried out in a county for which a distressed 
                county designation is in effect under section 
                14526 of this title) of the cost of any 
                activity eligible for financial assistance 
                under this section may be provided from amounts 
                appropriated to carry out this subtitle.]-
                  (A) In general.--Except as provided in 
                subparagraph (B), of the cost of any activity 
                eligible for financial assistance under this 
                section, not more than--
                          (i) 50 percent may be provided from 
                        amounts appropriated to carry out this 
                        subtitle;
                          (ii) in the case of a project to be 
                        carried out in a county for which a 
                        distressed county designation is in 
                        effect under section 14526, 80 percent 
                        may be provided from amounts 
                        appropriated to carry out this 
                        subtitle; or
                          (iii) in the case of a project to be 
                        carried out in a county for which an 
                        at-risk county designation is in effect 
                        under section 14526, 70 percent may be 
                        provided from amounts appropriated to 
                        carry out this subtitle.

           *       *       *       *       *       *       *

               CHAPTER 145--SPECIAL APPALACHIAN PROGRAMS

                         SUBCHAPTER I--PROGRAMS

Sec.
14501.  Appalachian development highway system.
     * * * * * * *
14508.  Economic and energy development initiative.
     * * * * * * *

                      SUBCHAPTER II--ADMINISTRATIVE

     * * * * * * *
[14526.  Distressed and economically strong counties.]
14526.  Distressed, at-risk, and economically strong counties.

SUBCHAPTER I--PROGRAMS

           *       *       *       *       *       *       *

Sec. 14502. Demonstration health projects

  (a) * * *

           *       *       *       *       *       *       *

  (d) Operation Grants.--
          (1) * * *
          [(2) Limitation on available amounts.--Grants under 
        this section for the operation (including initial 
        operating amounts and operating deficits, which include 
        the cost of attracting, training, and retaining 
        qualified personnel) of a demonstration health project, 
        whether or not constructed with amounts authorized by 
        this section, may be made for up to 50 percent of the 
        cost of that operation (or 80 percent of the cost of 
        that operation for a project to be carried out in a 
        county for which a distressed county designation is in 
        effect under section 14526 of this title).]
          (2) Limitation on available amounts.--Grants under 
        this section for the operation (including initial 
        operating amounts and operating deficits, which include 
        the cost of attracting, training, and retaining 
        qualified personnel) of a demonstration health project, 
        whether or not constructed with amounts authorized by 
        this section, may be made for up to--
                  (A) 50 percent of the cost of that operation;
                  (B) in the case of a project to be carried 
                out in a county for which a distressed county 
                designation is in effect under section 14526, 
                80 percent of the cost of that operation; or
                  (C) in the case of a project to be carried 
                out for a county for which an at-risk county 
                designation is in effect under section 14526, 
                70 percent of the cost of that operation.

           *       *       *       *       *       *       *

  (f) Maximum Commission Contribution.--
          (1) In general.--Subject to [paragraph (2)] 
        paragraphs (2) and (3), the Commission may contribute 
        not more than 50 percent of any project cost eligible 
        for financial assistance under this section from 
        amounts appropriated to carry out this subtitle.

           *       *       *       *       *       *       *

          (3) At-risk counties.--The maximum Commission 
        contribution for a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526 may be increased to the 
        lesser of--
                  (A) 70 percent; or
                  (B) the maximum Federal contribution 
                percentage authorized by this section.

           *       *       *       *       *       *       *

Sec. 14503. Assistance for proposed low- and middle-income housing 
                    projects

  (a) * * *

           *       *       *       *       *       *       *

  (d) Loans.--
          [(1) Limitation on available amounts.--A loan under 
        subsection (b) shall not be more than 50 percent (or 80 
        percent for a project to be carried out in a county for 
        which a distressed county designation is in effect 
        under section 14526 of this title) of the cost of 
        planning and obtaining financing for a project, 
        including preliminary surveys and analyses of market 
        needs, preliminary site engineering and architectural 
        fees, site options, application and mortgage commitment 
        fees, legal fees, and construction loan fees and 
        discounts.]
          (1) Limitation on available amounts.--A loan under 
        subsection (b) for the cost of planning and obtaining 
        financing (including the cost of preliminary surveys 
        and analyses of market needs, preliminary site 
        engineering and architectural fees, site options, 
        application and mortgage commitment fees, legal fees, 
        and construction loan fees and discounts) of a project 
        described in that subsection may be made for up to--
                  (A) 50 percent of that cost;
                  (B) in the case of a project to be carried 
                out in a county for which a distressed county 
                designation is in effect under section 14526, 
                80 percent of that cost; or
                  (C) in the case of a project to be carried 
                out for a county for which an at-risk county 
                designation is in effect under section 14526, 
                70 percent of that cost.

           *       *       *       *       *       *       *

  (e) Grants.--
          [(1) In general.--A grant under this section shall 
        not be made to an organization established for profit 
        and, except as provided in paragraph (2), shall not 
        exceed 50 percent (or 80 percent for a project to be 
        carried out in a county for which a distressed county 
        designation is in effect under section 14526 of this 
        title) of expenses, incident to planning and obtaining 
        financing for a project, which the Secretary considers 
        not to be recoverable from the proceeds of a permanent 
        loan made to finance the project.]
          (1) In general.--A grant under this section for 
        expenses incidental to planning and obtaining financing 
        for a project under this section that the Secretary 
        considers to be unrecoverable from the proceeds of a 
        permanent loan made to finance the project shall--
                  (A) not be made to an organization 
                established for profit; and
                  (B) except as provided in paragraph (2), not 
                exceed--
                          (i) 50 percent of those expenses;
                          (ii) in the case of a project to be 
                        carried out in a county for which a 
                        distressed county designation is in 
                        effect under section 14526, 80 percent 
                        of those expenses; or
                          (iii) in the case of a project to be 
                        carried out in a county for which an 
                        at-risk county designation is in effect 
                        under section 14526, 70 percent of 
                        those expenses.

           *       *       *       *       *       *       *

Sec. 14504. Telecommunications and technology initiative

  (a) * * *
  [(b) Limitation on Available Amounts.--Not more than 50 
percent (or 80 percent in the case of a project to be carried 
out in a county for which a distressed county designation is in 
effect under section 14526 of this title) of the cost of any 
activity eligible for a grant under this section may be 
provided from amounts appropriated to carry out this section.]
  (b) Limitation on Available Amounts.--Of the cost of any 
activity eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts 
        appropriated to carry out this section;
          (2) in the case of a project to be carried out in a 
        county for which a distressed county designation is in 
        effect under section 14526, 80 percent may be provided 
        from amounts appropriated to carry out this section; or
          (3) in the case of a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526, 70 percent may be provided 
        from amounts appropriated to carry out this section.

           *       *       *       *       *       *       *

Sec. 14505. Entrepreneurship initiative

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Limitation on Available Amounts.--Not more than 50 
percent (or 80 percent in the case of a project to be carried 
out in a county for which a distressed county designation is in 
effect under section 14526 of this title) of the cost of any 
activity eligible for a grant under this section may be 
provided from amounts appropriated to carry out this section.]
  (c) Limitation on Available Amounts.--Of the cost of any 
activity eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts 
        appropriated to carry out this section;
          (2) in the case of a project to be carried out in a 
        county for which a distressed county designation is in 
        effect under section 14526, 80 percent may be provided 
        from amounts appropriated to carry out this section; or
          (3) in the case of a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526, 70 percent may be provided 
        from amounts appropriated to carry out this section.

           *       *       *       *       *       *       *

Sec. 14506. Regional skills partnerships

  (a) * * *

           *       *       *       *       *       *       *

  [(d) Limitation on Available Amounts.--Not more than 50 
percent (or 80 percent in the case of a project to be carried 
out in a county for which a distressed county designation is in 
effect under section 14526 of this title) of the cost of any 
activity eligible for a grant under this section may be 
provided from amounts appropriated to carry out this section.]
  (d) Limitation on Available Amounts.--Of the cost of any 
activity eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts 
        appropriated to carry out this section;
          (2) in the case of a project to be carried out in a 
        county for which a distressed county designation is in 
        effect under section 14526, 80 percent may be provided 
        from amounts appropriated to carry out this section; or
          (3) in the case of a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526, 70 percent may be provided 
        from amounts appropriated to carry out this section.

           *       *       *       *       *       *       *

Sec. 14507. Supplements to federal grant programs

  (a) * * *

           *       *       *       *       *       *       *

  (g) Maximum Commission Contribution.--
          (1) In general.--Subject to [paragraph (2)] 
        paragraphs (2) and (3), the Commission may contribute 
        not more than 50 percent of a project or activity cost 
        eligible for financial assistance under this section 
        from amounts appropriated to carry out this subtitle.

           *       *       *       *       *       *       *

          (3) At-risk counties.--The maximum Commission 
        contribution for a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526 may be increased to 70 
        percent.

Sec. 14508. Economic and energy development initiative

  (a) Projects To Be Assisted.--The Appalachian Regional 
Commission may provide technical assistance, make grants, enter 
into contracts, or otherwise provide amounts to persons or 
entities in the Appalachian region for projects--
          (1) to promote energy efficiency in the region to 
        enhance its economic competitiveness;
          (2) to increase the use of renewable energy resources 
        in the region to produce alternative transportation 
        fuels, electricity, and heat; and
          (3) to support the development of conventional energy 
        resources in the region to produce alternative 
        transportation fuels, electricity, and heat.
  (b) Limitation on Available Amounts.--Of the cost of any 
project eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts 
        appropriated to carry out this section;
          (2) in the case of a project to be carried out in a 
        county for which a distressed county designation is in 
        effect under section 14526, 80 percent may be provided 
        from amounts appropriated to carry out this section; or
          (3) in the case of a project to be carried out in a 
        county for which an at-risk county designation is in 
        effect under section 14526, 70 percent may be provided 
        from amounts appropriated to carry out this section.
  (c) Sources of Assistance.--Assistance under this section may 
be provided from amounts made available to carry out this 
section in combination with amounts made available under other 
Federal programs or from any other source.
  (d) Federal Share.--Notwithstanding any provision of law 
limiting the Federal share under any other Federal program, 
amounts made available to carry out this section may be used to 
increase that Federal share, as the Commission decides is 
appropriate.

SUBCHAPTER II--ADMINISTRATIVE

           *       *       *       *       *       *       *

Sec. 14526. Distressed, at-risk, and economically strong counties

  (a) Designations.--
          (1) In general.--The Appalachian Regional Commission, 
        in accordance with criteria the Commission may 
        establish, each year shall--
                  (A) designate as ``distressed counties'' 
                those counties in the Appalachian region that 
                are the most severely and persistently 
                distressed; [and]
                  (B) designate as ``at-risk counties'' those 
                counties in the Appalachian region that are 
                most at risk of becoming economically 
                distressed; and
                  [(B)] (C) designate two categories of 
                economically strong counties, consisting of--
                          (i) * * *

           *       *       *       *       *       *       *

CHAPTER 147--MISCELLANEOUS

           *       *       *       *       *       *       *

Sec. 14703. Authorization of appropriations

  [(a) In General.--In addition to amounts authorized by 
section 14501 of this title and other amounts made available 
for the Appalachian development highway system program, the 
following amounts may be appropriated to the Appalachian 
Regional Commission to carry out this subtitle:
          [(1) $88,000,000 for each of the fiscal years 2002-
        2004.
          [(2) $90,000,000 for fiscal year 2005.
          [(3) $92,000,000 for fiscal year 2006.
  [(b) Telecommunications and Technology Initiative.--Of the 
amounts made available under subsection (a), the following 
amounts are available to carry out section 14504 of this title:
          [(1) $10,000,000 for fiscal year 2002.
          [(2) $8,000,000 for fiscal year 2003.
          [(3) $5,000,000 for each of the fiscal years 2004-
        2006.]
  (a) In General.--In addition to amounts made available under 
section 14501, there is authorized to be appropriated to the 
Appalachian Regional Commission to carry out this subtitle 
(other than section 14508)--
          (1) $65,000,000 for fiscal year 2007;
          (2) $80,000,000 for fiscal year 2008;
          (3) $85,000,000 for fiscal year 2009;
          (4) $90,000,000 for fiscal year 2010; and
          (5) $95,000,000 for fiscal year 2011.
  (b) Economic and Energy Development Initiative.--In addition 
to amounts made available under section 14501, there is 
authorized to be appropriated to the Commission to carry out 
section 14508 $12,000,000 for each of fiscal years 2008 through 
2011.
  (c) Availability.--Amounts made available under [subsection 
(a)] subsections (a) and (b) remain available until expended.
  (d) Allocation of Funds.--Funds approved by the Commission 
for a project in a State in the Appalachian region pursuant to 
congressional direction shall be derived from such State's 
portion of the Commission's allocation of appropriated amounts 
among the States.

Sec. 14704. Termination

  This subtitle, except sections 14102(a)(1) and (b) and 14501, 
ceases to be in effect on October 1, [2006] 2011.

           *       *       *       *       *       *       *

                                  
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