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[Senate Report 110-63]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 136
110th Congress                                                   Report
                                 SENATE
 1st Session                                                     110-63

======================================================================

 
        APPALACHIAN REGIONAL DEVELOPMENT ACT AMENDMENTS OF 2007

                                _______
                                

                  May 7, 2007.--Ordered to be printed

                                _______
                                

    Mrs. Boxer, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 496]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred a bill (S. 496) to reauthorize and improve the program 
authorized by the Appalachian Regional Development Act of 1965, 
having considered the same, reports favorably thereon and 
recommends that the bill as amended do pass.

                       Purpose of the Legislation

    S. 496, the Appalachian Regional Development Act Amendments 
of 2007, provides for the reauthorization and improvement of 
the Appalachian Regional Development Act of 1965. The bill 
strengthens the Act by providing tools to better assist those 
counties most at-risk of becoming economically distressed and 
by increasing the authorization level of the Act. S. 496 
authorizes appropriations for the Appalachian Regional 
Commission programs for five years.

                    General Statement and Background

    The Appalachian Regional Development Act of 1965 (title 40, 
subtitle IV, United States Code) established the Appalachian 
Regional Commission (ARC). ARC is a Federal-State partnership 
that works with the people of Appalachia to create 
opportunities for self-sustaining economic development and 
improved quality of life. ARC includes all or portions of 13 
States: Alabama, Georgia, Kentucky, Maryland, 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 a highway 
system, education and job training, and water and sewer 
systems.
    ARC administers economic development funds through a series 
of grant programs. The agency generally allocates funds based 
on the economic distress of a given locality, devoting a 
significant percentage of its resources to benefit economically 
distressed communities. By law, at least 50 percent of all non-
highway project grant funds must go to distressed counties and 
areas. In fiscal year 2006, for example, 61 percent of ARC's 
non-highway funds supported projects that primarily or 
substantially benefited distressed counties and areas.
    Since its creation in 1965, ARC's funding and projects have 
contributed significantly to improvements in the region. The 
number of economically distressed counties has been cut by more 
than half, from 223 distressed counties in 1965 to 78 counties 
in 2007. The regional poverty rate has been cut by more than 
half. High school graduation rates have increased by more than 
70 percent. The infant mortality rate has been cut by two-
thirds, and more than 400 ARC-funded rural health facilities 
have expanded access to health care across Appalachia. Since 
1977, ARC has invested $37.6 million in revolving loan funds 
that generated $123 million in loans for small businesses and 
leveraged $8.41 in other investment for each ARC dollar, 
helping create more than 30,000 jobs.
    Unfortunately, however, roughly one-fifth of ARC's counties 
remain distressed. Additionally, one-fourth of Appalachia's 
counties have a poverty rate more than 150 percent of the 
national average and a majority of the counties have a higher 
unemployment rate than the national average.

                      Section-by-Section Analysis

Section 1. Short title

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

Sec. 2. Limitation on available amounts; Maximum commission 
        contribution

            Summary
    Section 2 amends section 14321, 14502, 14503, 14504, 14505, 
14506, and 14507 of Title 40, United States Code, to provide a 
maximum grant rate of 70 percent for designated at-risk 
counties.
            Description
    ARC's grant programs include assistance for economic 
development, demonstration health projects, assistance for 
proposed low- and middle-income housing projects, a 
telecommunications and technology initiative, an 
entrepreneurship initiative, a regional skills partnership, and 
supplements to Federal grant programs. Currently each of these 
non-highway programs includes a maximum grant rate of 75 for 
administrative expenses and 80 percent for the cost of eligible 
projects for distressed counties, and 50 percent for all other 
counties. This section provides ARC with an additional tool to 
try to prevent those counties most at risk of becoming 
economically distressed from actually becoming distressed by 
providing a maximum grant rate for these `at-risk' counties of 
70 percent for all of ARC's non-highway grant programs.

Sec. 3. Economic and Energy Development Initiative

            Summary
    This section amends subchapter I of chapter 145, subtitle 
IV of Title 40, by adding Section 14508, the Economic and 
Energy Development Initiative.
            Description
    This provision will allow the Appalachian Regional 
Commission to provide technical assistance, grants, or enter 
into contracts with individuals or entities to promote energy 
efficiency, renewable energy resources, and to enhance the 
economic competitiveness of the Appalachian region.

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

            Summary
    This section amends section 14526(a)(1) of title 40, United 
States Code, to direct the Commission to designate as `at-risk' 
those counties that are most at risk of becoming economically 
distressed.

Sec. 5. Authorization of appropriations

            Summary
    This section amends section 14703 of title 40, United 
States Code, to set authorization levels for fiscal years 2007-
2011.
            Description
    The section authorizes $95.2 million in fiscal year 2007; 
$98.6 million in fiscal year 2008; $102 million in fiscal year 
2009; $105.7 million in fiscal year 2010; and $109.4 in fiscal 
year 2011. These levels include increases in line with 
projected inflation rates (Historical Tables of the U.S. 
Government Budget, Table 10.1, (`Other Grants').) Further, 
spending for Section 14504, Telecommunications and Technology 
is specified as $10,000,000 for fiscal year 2007; $8,000,000 
for fiscal year 2008; $5,000,000 for each of the fiscal years 
2009 through 2011. The bill also specifies the expenditures for 
economic and energy initiative as follows: $12,000,000 for 
fiscal year 2007; $12,400,000 for fiscal year 2008; $12,900,000 
for fiscal year 2009; $13,300,000 for fiscal year 2010; and 
$13,800,000 for fiscal year 2011.

Sec. 6. Termination

    This section amends section 14704 of title 40, United 
States Code, to extend the date on which the Appalachian 
Regional Development Act of 1965 (with the exception of the 
Appalachian development highway system and the definition of 
the Appalachian region) ceases to be in effect from October 1, 
2007, to October 1, 2011.

Sec. 7. Effective date

    This section states that the amendments made by this Act 
take effect on October 1, 2006.

                          Legislative History

    On February 6, 2007 Senator Voinovich introduced S. 496, 
which was co-sponsored by Senators Clinton, Warner, Byrd, Lott, 
Brown, Cochran, Schumer, Burr, Cardin, Mikulski, Dole, 
Alexander, Shelby, Graham, Rockefeller, Sessions, Specter, and 
McConnell. The bill was read twice and referred to the Senate 
Committee on Environment and Public Works. The committee met on 
March 29, 2007 to consider the bill as amended by a Chairman's 
mark amendment. S. 496 as revised by the Chairman's mark was 
ordered favorably reported without amendment by voice vote.

                                Hearings

    The Committee did not hold hearings on S. 496 during the 
110th Congress. However, on April 20, 2006, the Committee on 
Environment and Public Works conducted a field hearing in 
Marietta, Ohio, to receive testimony on the impact of the 2002 
reauthorization and issues regarding the upcoming 
reauthorization. The committee received testimony from Ms. Anne 
Pope, Federal Co-Chair, Appalachian Regional Commission; Mr. 
T.J. Justice, Director, Governor's Office of Appalachia, 
Appalachian Regional Commission; Mr. Don Myers, Director, Ohio 
Mid-Eastern Governments Association; Mr. Gary Little, 
President, Information Technology Alliance of Appalachian Ohio; 
Mr. David Matusoff, Principal and Director of Technology 
Planning, Whiteboard Broadband Solutions; Dr. David Scholl, 
President, CEO, Diagnostic Hybrid, Inc.; Ms. Angela Stuber, 
Executive Director, Ohio Community Computing Network; Mr. Steve 
Grossman, Executive Director, Ohio Water Development Authority; 
Mr. Jeff Hughes, Director, Environmental Finance Center, 
University of North Carolina at Chapel Hill, Institute of 
Government; and Mr. Ken Reed, Director, Vinton County Community 
and Economic Development, Vinton County Courthouse.

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 496 as revised by the Chairman's mark amendment on 
March 29, 2007. The Chairman's mark was ordered favorably 
reported by voice vote. No rollcall votes were taken.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee finds that S. 496 
does not create any additional regulatory burdens, nor will it 
cause any adverse impact on the personal privacy of 
individuals.

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the committee finds that S. 496 would 
impose no Federal intergovernmental unfunded mandates on State, 
local, or tribal governments. The bill contains no new private-
sector mandates as defined in UMRA.

                          Cost of Legislation

    Section 402 of the Congressional Budget and Impoundment 
Control Act, 2 U.S.C. Sec. 653, requires that any timely-
submitted estimate of the cost of the reported bill prepared by 
the Congressional Budget Office be included in this report. 
That statement follows:

S. 496, Appalachian Regional Development Act Amendments of 2007, As 
        ordered reported by the Senate Committee on Environment and 
        Public Works on March 29, 2007

    Summary: S. 496 would authorize appropriations for the 
Appalachian Regional Commission (ARC), modify the terms of some 
existing programs, and create a new grant program to promote 
energy efficiency and renewable energy in the Appalachian 
region. The bill would authorize a total of $511 million over 
2007-2011 period, including $95 million for fiscal year 2007. 
S. 496 also would allow the ARC to increase the government's 
share of the cost of projects in counties most at risk of 
becoming economically distressed.
    CBO estimates that implementing this bill would cost $294 
million over the 2007-2012 period, assuming appropriation of 
the specified amounts. Enacting S. 496 would have no effect on 
direct spending or revenues.
    S. 496 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would benefit local governments in the Appalachian region.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 496 is shown in the following table. The 
costs of this legislation fall within budget function 450 
(community and regional development).

----------------------------------------------------------------------------------------------------------------
                                                                     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:
    Budget Authority \1\........................................      65       0       0       0       0       0
    Estimated Outlays...........................................      64      60      51      29      15       7
Proposed Changes:
    Economic Development Grants
        Authorization Level.....................................      18      87      89      93      95       0
        Estimated Outlays.......................................       2      12      32      56      71      75
    Energy Grants
        Authorization Level.....................................      12      12      13      13      14       0
        Estimated Outlays.......................................       1       4       7      10      12      12
    Total Changes
        Authorization Level.....................................      30      99     102     106     109       0
        Estimated Outlays.......................................       3      16      39      66      83      87
Spending Under S. 496 for the Appalachian Regional Commission:
    Authorization Level.........................................      95      99     102     106     109       0
    Estimated Outlays...........................................      67      76      90      95      98      94
----------------------------------------------------------------------------------------------------------------
\1\ The 2007 level is the amount provided thus far for this year under Public Law 110-5. S. 496 would authorize
  the appropriation of $95 million for 2007.

    Basis of estimate: S. 496 would authorize the appropriation 
of $511 million over the 2007-2011 period for the ARC, which 
makes grants to the 13 states of the Appalachian region. Based 
on historical spending patterns, CBO estimates that 
implementing S. 496 would cost $3 million in 2007 and $294 
million over the 2007-2012 period. For this estimate, CBO 
assumes that this legislation will be enacted in the spring of 
2007 and that the authorized amounts will be appropriated for 
each year.
    The funding authorized by S. 496 includes $95 million for 
fiscal year 2007, of which $12 million would be for a new grant 
program to promote energy efficiency and renewable energy in 
the Appalachian region. Thus far, the ARC has received funding 
of $65 million for fiscal year 2007 under Public Law 110-5, the 
Revised Continuing Appropriations Resolution, 2007. Thus, 
enacting this legislation would authorize the appropriation of 
an additional $30 million for the ARC in 2007. For this 
estimate, CBO assumes that the added amount would be provided 
in a supplemental appropriation.
    The bill also would specify funding levels for fiscal years 
2008 through 2011, authorizing the appropriation of $416 
million over those four years. That total includes $364 million 
for ARC's existing grant programs, of which $23 million would 
be allocated for the commission's Telecommunications and 
Technology Initiative. The remaining $52 million would be 
authorized for the new energy grant program.
    Intergovernmental and private-sector impact: S. 496 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would benefit local governments in the 
Appalachian region.
    Previous CBO estimate: On February 13, 2007, CBO 
transmitted a cost estimate for H.R. 799, the Appalachian 
Regional Development Act Amendments of 2007, as ordered 
reported by the House Committee on Transportation and 
Infrastructure on February 7, 2007. S. 496 and H.R. 799 are 
similar but would authorize different amounts of funding. In 
addition, CBO has updated the estimated spending under current 
law to reflect the amounts appropriated under Public Law 110-5.
    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: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                        Changes in Existing Law

    In compliance with section 12 of rule XXVI of the Standing 
Rules of the Senate, 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:

           *       *       *       *       *       *       *

             SUBTITLE IV--APPALACHIAN REGIONAL DEVELOPMENT

[As Amended Through P.L. 109-270, Enacted August 12, 2006]

           *       *       *       *       *       *       *

Sec. 14101. Findings and purposes

  (a) 1965 Findings and Purpose.--
          (1) Findings.--* * *

           *       *       *       *       *       *       *

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 project 
                eligible for financial assistance under this 
                section, not more than--
                          (i) 50 percent may be provided from 
                        amounts made available 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 made 
                        available 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 made available to 
                        carry out this subtitle.

           *       *       *       *       *       *       *

               CHAPTER 145--SPECIAL APPALACHIAN PROGRAMS

      [As Amended Through P.L. 108-199, Enacted January 23, 2004]

                         SUBCHAPTER I--PROGRAMS

Sec.
14501.  Appalachian development highway system.
14502.  Demonstration health projects.
14503.  Assistance for proposed low- and middle-income housing projects.
14504.  Telecommunications and technology initiative.
14505.  Entrepreneurship initiative.
14506.  Regional skills partnerships.
14507.  Supplements to federal grant programs.
14508.  Economic and energy development initiative.

                      SUBCHAPTER II--ADMINISTRATIVE

14521.  Required level of expenditure.
14522.  Consent of States.
14523.  Program implementation.
14524.  Program development criteria.
14525.  State development planning process.
[14526.  Distressed and economically strong counties.]
14526.  Distressed, at-risk, and economically strong counties.

                         SUBCHAPTER I--PROGRAMS

Sec. 14501. Appalachian development highway system

  (a) Purpose.--* * *

           *       *       *       *       *       *       *

Sec. 14502. Demonstration health projects

  (a) Purpose.--* * *

           *       *       *       *       *       *       *

  (d) Operation Grants.--
          (1) Standards for making grants.--* * *

           *       *       *       *       *       *       *

          [(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 to 
        be appropriated by this section, may be provided 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 in 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), 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.
          (2) Distressed counties.--The maximum Commission 
        contribution 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 may be 
        increased to the lesser of--
                  (A) 80 percent; or
                  (B) the maximum federal contribution 
                percentage authorized by this section.
          (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) Appalachian Housing Fund.--
          (1) Establishment.--* * *

           *       *       *       *       *       *       *

  (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 in 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) Projects To Be Assisted.--* * *

           *       *       *       *       *       *       *

  [(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 
project eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts made 
        available 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 made available 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 made available to carry out this section.

           *       *       *       *       *       *       *

Sec. 14505. Entrepreneurship initiative

  (a) Business Incubator Service.--In this section, the term 
``business incubator service'' means a professional or 
technical service necessary for the initiation and initial 
sustainment of the operations of a newly established business, 
including a service such as--
          (1) * * *

           *       *       *       *       *       *       *

  [(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 
project eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts made 
        available 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 made available 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 made available to carry out this section.

           *       *       *       *       *       *       *

Sec. 14506. Regional skills partnerships

  (a) Eligible Entity.--In this section, the term ``eligible 
entity'' means a consortium that--
          (1) * * *

           *       *       *       *       *       *       *

  [(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 
project eligible for a grant under this section, not more 
than--
          (1) 50 percent may be provided from amounts made 
        available 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 made available 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 made available to carry out this section.

           *       *       *       *       *       *       *

Sec. 14507. Supplements to federal grant programs

  (a) Definition.--
          (1) Federal grant programs.--In this section, the 
        term ``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.
          (2) Distressed counties.--* * *
          (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, provide grants, 
enter into contracts, or otherwise provide amounts to 
individuals or entities in the Appalachian region for use in 
carrying out projects and activities--
          (1) to promote energy efficiency in the Appalachian 
        region to enhance the economic competitiveness of the 
        Appalachian region; and
          (2) to increase the use of renewable energy 
        resources, particularly biomass, in the Appalachian 
        region to produce alternative transportation fuels, 
        electricity, and heat.
  (b) Limitation on Available Amounts.--Of the cost of any 
project eligible to be funded by a grant under this section, 
not more than--
          (1) 50 percent may be provided from amounts made 
        available 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 made available to carry out this section; 
        and
          (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 made available to carry out this section.
  (c) Sources of Assistance.--Subject to subsection (b), grants 
provided under this section may be provided--
          (1) entirely from amounts made available to carry out 
        this section; or
          (2) 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 other provision of 
law limiting a Federal share of the cost of a project under any 
other Federal program, amounts made available to carry out this 
section may be used to increase that Federal share, as the 
Commission determines to be appropriate.

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                     SUBCHAPTER II--ADMINISTRATIVE

Sec. 14521. Required level of expenditure

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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--

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[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.
  [(c) Availability.--Amounts made available under subsection 
(a) remain available until expended.]

Sec. 14703. Authorization of appropriations

  (a) In General.--In addition to the amounts made available 
under section 14501, there are authorized to be appropriated to 
the Appalachian Regional Commission to carry out this 
subtitle--
          (1) $95,200,000 for fiscal year 2007;
          (2) $98,600,000 for fiscal year 2008;
          (3) $102,000,000 for fiscal year 2009;
          (4) $105,700,000 for fiscal year 2010; and
          (5) $109,400,000 for fiscal year 2011.
  (b) Telecommunications and Technology Initiative.--Of the 
amounts made available under subsection (a), the following 
amounts may be used to carry out section 14504:
          (1) $10,000,000 for fiscal year 2007.
          (2) $8,000,000 for fiscal year 2008.
          (3) $5,000,000 for each of fiscal years 2009 through 
        2011.
  (c) Economic and Energy Initiative.--Of the amounts made 
available under subsection (a), the following amounts may be 
used to carry out section 14508:
          (1) $12,000,000 for fiscal year 2007.
          (2) $12,400,000 for fiscal year 2008.
          (3) $12,900,000 for fiscal year 2009.
          (4) $13,300,000 for fiscal year 2010.
          (5) $13,800,000 for fiscal year 2011.
  (d) Availability.--Amounts made available under subsection 
(a) shall remain available until expended.
  (e) Allocation of Funds.--Funds approved by the Appalachian 
Regional Commission for a project in an Appalachian State 
pursuant to a congressional directive shall be derived from the 
total amount allocated to the State by the Appalachian Regional 
Commission from amounts made available to carry out this 
subtitle.

Sec. 14704. Termination

  This subtitle, except sections 14102(a)(1) and (b) and 14501, 
ceases to be in effect on October 1, [2007] 2011.

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