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[Senate Report 107-132]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 303
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-132

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

 
        APPALACHIAN REGIONAL DEVELOPMENT ACT AMENDMENTS OF 2001

                                _______
                                

   December 20 (legislative day, December 18), 2001.--Ordered to be 
                                printed

                                _______
                                

   Mr. Jeffords, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [to accompany S. 1206]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred a bill (S. 1206), to reauthorize the Appalachian 
Regional Development Act of 1965, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.

                               Background

    The Appalachian Regional Development Act of 1965 (ARDA) 
established the Appalachian Regional Commission. The 
Appalachian Regional Commission (ARC) is a regional economic 
development agency representing a unique 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 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 economically 
distressed communities. Over the last 4 years, ARC has 
dedicated over 30 percent of its non-highway funds to 
distressed counties. In fiscal year 2000 almost half of the 
non-highway funds went to distressed counties. But roughly 25 
percent of ARC's 406 counties remained distressed. A need still 
exists to help these areas of greatest distress to share in the 
quality of life generally enjoyed by citizens throughout the 
United States. ARC will continue to help meet this immediate 
need.
    Since its creation in 1965, ARC's funding and projects have 
contributed significantly to improvements in the region. The 
regional poverty rate has been cut in 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 4 million Appalachians. ARC 
projects have provided more than 800,000 Appalachians with 
access to clean water and sanitation facilities.
    Even with these tremendous gains, there is still a need for 
the ARC. The economic prosperity of the 1990's did not reach 
all of Appalachia. High poverty and unemployment still prevail 
in many regions of Appalachia. During the 1990's, ARC continued 
to provide economic assistance to the region through various 
ARC programs. More recently, with the losses in the region's 
coal industry, ARC has worked diligently to help the region 
develop sustainable economically viable projects to replace 
coal mining and other dying industries.
    S. 1206, ``Appalachian Regional Development Act Amendments 
of 2001,'' allows ARC to continue its economic development 
activities and to provide additional tools to help improve the 
quality of life in Appalachia. S. 1621 also establishes two 
important initiatives telecommunications and technology and 
entrepreneurship to help Appalachia keep pace in a dynamic 21st 
Century economy. The 2001 amendments also create regional 
skills partnerships to improve the job skills of workers in 
Appalachia.

                      Section-by-Section Analysis

Section 1. Short Title
    Appalachian Regional Development Act Amendments of 2001.
Section 2. Purposes

                                Summary

    Section 2 sets out the purposes of the legislation.

                               Discussion

    The purpose of this Act is to reauthorize the Appalachian 
Regional Development Act of 1965 (ARDA) and to ensure that the 
people and businesses of Appalachia have the necessary 
knowledge, skills, and access to telecommunications and 
technology services to compete in a knowledge-based economy. 
The purpose of this Act is also to ensure that Appalachians 
have viable entrepreneurial opportunities and the necessary job 
skills to compete in the national economy.
    The Act also inserts a provision to encourage the 
Appalachian region to take advantage of eco-industrial 
development. Eco-industrial development includes communities of 
businesses cooperating with each other and the local community 
to efficiently share resources (information, materials, water, 
energy, infrastructure and natural habitat), leading to 
economic gains, improved environmental quality, and equitable 
enhancement of human resources for business and local 
communities.
Section 3. Functions of the Commission
    Section 3 expands the functions of the Commission to 
include the promotion of eco-industrial development and to 
coordinate the economic development activities of Federal 
agencies in the region.
Section 4. Interagency Coordinating Council on Appalachia

                                Summary

    Section 4 creates an Interagency Coordinating Council on 
Appalachia.

                               Discussion

    While ARC generally administers funds according to State 
development plans, other Federal agencies may provide 
assistance not accounted for in these plans. The committee 
recognizes the need for coordination of Federal agencies 
promoting economic development in Appalachia. Section 4 
addresses this need for coordination by creating an Interagency 
Coordinating Council on Appalachia. The Federal co-chairman, 
serving as the chairperson of the Council, and representatives 
of those Federal agencies administering economic development 
programs in the region will compose the Council.
Section 5. Telecommunications and Technology Initiative

                                Summary

    Section 5 amends the ARDA by inserting a new section 203 
permitting ARC to establish a telecommunications and technology 
initiative. The section also directs ARC to conduct a broadband 
study.

                               Discussion

    Section 5 allows ARC to provide technical assistance, to 
make grants, to enter into contracts, and to otherwise provide 
funds to persons or entities (excluding for-profit entities) in 
the region to establish a telecommunications and technology 
initiative. The initiative will increase affordable access to 
advanced telecommunications, entrepreneurship, and management 
technologies and will provide education and training in the use 
of telecommunications and technology. The initiative would also 
develop programs to increase the readiness of industry groups 
and businesses in the region to engage in electronic commerce. 
Industry groups may include, but are not limited to, chambers 
of commerce and national, State, and local associations. ARC 
may provide up to 50 percent (or 80 percent for projects in a 
distressed county) of the costs of any activity eligible for a 
grant under this initiative.
    Additionally, this section directs ARC to conduct a study 
to determine the availability of broadband telecommunications 
service and internet access in Appalachia. ARC will complete 
the study not later than 18 months after the enactment date of 
this Act.
Section 6. Entrepreneurship Initiative

                                Summary

    Section 6 amends the ARDA by inserting a new section 204 to 
establish an entrepreneurship initiative.

                               Discussion

    Section 6 amends the ARDA and establishes an 
entrepreneurship initiative. The section provides for the 
establishment of business incubators to provide professional 
and technical assistance to startup businesses. ARC may provide 
technical assistance, make grants, and enter into contracts for 
a variety of entrepreneurial projects. Technical assistance may 
include, but is not limited to, legal services and consultation 
on strategic planning, marketing, or advertising.
    ARC may provide up to 50 percent (or 80 percent for 
projects in a distressed county) of the costs of any activity 
eligible for a grant under this section.
Section 7. Regional Skills Partnerships

                                Summary

    Section 7 amends the ARDA by inserting a new section 205 
establishing regional skills partnerships.

                               Discussion

    Entities eligible to enter into regional skills 
partnerships under the new section 205 include those entities 
established to serve one or more industries in a specified 
geographic area and consist of representatives of businesses, 
labor organizations, State and local governments, or 
educational institutions. These partnerships will provide 
training and assistance to members and non-members of the 
organizations forming the partnerships.
    Under these partnerships, ARC may provide technical 
assistance, make grants, enter into contracts, or otherwise 
provide funds to eligible entities in a given region for 
projects to improve worker job skills for a specified industry. 
The projects may include assessment of training and job skill 
needs for an industry or development of curricula and training 
methods.
    This Act provides that an eligible entity may not spend 
more than 10 percent of available funds to administer a 
project. ARC may provide up to 50 percent (or 80 percent for 
projects in a distressed county) of the costs of any activity 
eligible for a grant under this section.
Section 8. Program Development Criteria

                                Summary

    Section 8 amends the ARDA by requiring that at least 50 
percent of all non-highway project grant funds go to distressed 
counties and areas.

                               Discussion

    The committee recognizes that ARC has made significant 
efforts to help distressed counties. Since ARC's inception over 
30 years ago, the number of distressed counties in the 
Appalachian region has been cut in half. Still, today 118 of 
ARC's 406 counties remain distressed. The committee also notes 
that pockets of distress exist in transitional, competitive, 
and attainment counties. These distressed counties and areas 
require the special attention of the Commission. While the ARDA 
requires ARC to address the needs of severely and persistently 
distressed areas of the Appalachian region, it does not 
specifically establish spending mandates for distressed 
counties and areas. S. 1206 addresses this important issue.
    To focus economic development funds to the most needy 
counties and areas, this Act requires ARC to dedicate at least 
50 percent of all non-highway funds to distressed counties and 
areas. In meeting this requirement, the committee expects ARC 
will include those funds spent not only in distressed counties, 
but in distressed areas as well. This will require ARC to 
develop a clear definition of distressed areas. The committee 
expects ARC to establish a definition of distressed areas 
within 60 days of the passage of this Act.
Section 9. Grants for Administrative Expenses of Local Development 
        Districts
    Section 9 amends the ARDA by providing grants for 
administrative expenses at 75 percent Federal share for local 
development districts that include one or more distressed 
counties. Local development districts not containing a 
distressed county still remain eligible for administrative 
grants with a 50 percent Federal cost share.
Section 10. Authorization of Appropriations

                                Summary

    Section 10 authorizes the appropriation of funds under this 
Act.

                               Discussion

    This Act authorizes $88 million for fiscal year 2002 
through 2004; $90 million for fiscal year 2005; and $92 million 
for fiscal year 2006. Of the authorized amount, ARC may make 
available $10 million in fiscal year 2002, $8 million for 
fiscal year 2003, and $5 million for each of fiscal years 2004 
through 2006 to facilitate the telecommunications and 
technology initiative.
Section 11. Studies

                                Summary

    Section 11 directs ARC to complete a study on the regional 
characteristics of upper New York State and to conduct a study 
of the impacts of the September 11th attack on the economy of 
New York.

                               Discussion

    Section 11 amends the completion date of a study in the 
ARDA on the regional characteristics of upper New York State 
from June 30, 1970 to September 30, 2002. The study will 
examine whether economic conditions in upstate New York warrant 
the addition of upstate counties to the Commission.
    The second study will examine the immediate and long-term 
economic impacts of the September 11th attack on New York City 
and on other areas of New York State. The study will also 
identify mechanisms and resources to prevent, reduce, and 
ameliorate the impacts of the terrorist attack. This Act also 
authorizes the appropriation of $300,000 for fiscal year 2002 
for the study.
Section 12. Termination
    Section 12 authorizes the Appalachian Regional Commission 
for an additional 5 years until October 1, 2006.
Section 13. Technical and Conforming Amendments
    Section 13 makes several technical and conforming 
amendments.

                          Legislative History

    Senator George Voinovich introduced S. 1206 on July 19, 
2001. No hearings were held on the bill. The full committee 
considered S. 1206 on September 25, 2001. At that meeting, 
Senator Jeffords offered an amendment in the nature of a 
substitute, which, upon adoption, was further amended by an 
amendment offered by Senator Hillary Rodham Clinton. The 
committee reported S. 1206, as amended, by voice vote.

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 1206 on September 25, 2001, and reported S. 1206, 
as amended, by voice vote.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee makes the following 
evaluation of the regulatory impact of the reported bill.
    The bill 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. 1206 would 
impose no unfunded mandates on local, State, or tribal 
governments.

                          Cost of Legislation

    Section 403 of the Congressional Budget and Impoundment 
control Act requires that a statement of the cost of the 
reported bill, prepared by the Congressional Budget Office, be 
included in the report. That statement follows:
                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 2, 2001.

Hon. James Jeffords, Chairman,
Committee on Environment and Public Works,
U.S. Senate, Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office has prepared 
the enclosed cost estimate for S. 1206, the Appalachian 
Regional Development Act Amendments of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts is Lanette J. 
Walker, who can be reached at 226-2860.
            Sincerely,
                                             Dan L. Crippen
                              ----------                              

S. 1206, Appalachian Regional Development Act Amendments of 2001, as 
        ordered reported by the Senate Committee on Environment and 
        Public Works on September 25, 2001
Summary
    S. 1206 would authorize the appropriation of $446 million 
for the Appalachian Regional Commission over the 2002-2006 
period. The bill would establish an Interagency Coordinating 
Council on Appalachia and create a program to provide enhanced 
access to telecommunications and technology. The bill also 
would authorize the Appalachian Regional Commission, together 
with an academic institution located in New York State, to 
conduct a study of the economic impacts of the terrorist 
attacks on September 11, 2001.
    CBO estimates that implementing S. 1206 would cost $236 
million over the 2002-2006 period, assuming the appropriation 
of the authorized amounts. Because this bill would not affect 
direct spending or receipts, pay-as-you-go procedures would not 
apply.
    S. 1206 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would authorize new grants, some of which would be 
available to State and local governments and would require 
matching funds from those governments. Any costs associated 
with receiving those grants would be voluntary.
Estimated Cost to the Federal Government
    The estimated budgetary impact of S. 1206 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
----------------------------------------------------------------------------------------------------------------
                                                                   2001    2002    2003    2004    2005    2006
----------------------------------------------------------------------------------------------------------------
          CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for the Appalachian Regional
 Commission.....................................................
    Budget Authority\1\.........................................      77       0       0       0       0       0
    Estimated Outlays...........................................     118      92      66      36      18       7

Proposed Changes................................................
    Authorization Level.........................................       0      88      88      88      90      92
    Estimated Outlays...........................................       0       9      26      53      68      80

Spending Under S. 1206 for the Appalachian Regional Commission..
    Authorization Level\1\......................................      77      88      88      88      90      92
    Estimated Outlays...........................................     118     101      92      89      86      87
----------------------------------------------------------------------------------------------------------------
\1\ The 2001 level is the amount appropriated for that year for the Appalachian Regional Commission, a full-year
  appropriation for this agency has not yet been enacted for fiscal year 2002.

Basis of Estimate
    For this estimate we assume that the authorized amounts 
will be provided each year and that spending will follow 
historical patterns. CBO estimates that implementing S. 1206 
would cost $236 million over the next 5 years.
    S. 1206 would authorize the appropriation of $413 million 
over the 2002-2006 period for the Appalachian Regional 
Commission to provide grants to State and local governments to 
support economic and social development within Appalachia. In 
addition, the bill would create a program to provide enhanced 
access to telecommunications and technology and authorize the 
appropriation of $10 million in fiscal year 2002, $8 million in 
fiscal year 2003, and $5 million in each of fiscal years 2004 
through 2006 for this program.
    S. 1206 also would authorize the Appalachian Regional 
Commission, together with an academic institution located in 
New York State, to conduct a study of the economic impacts of 
the September 11 terrorist attacks. The study must be completed 
within 1 year of enactment of the legislation. The bill would 
authorize the appropriation of $300,000 in fiscal year 2002 to 
cover the cost of the study.
Pay-As-You-Go Considerations: None.

Intergovernmental and Private-Sector Impact
    S. 1206 contains no intergovernmental or private-sector 
mandates as defined in UMRA. New authorizations of 
appropriations totaling $446 million over the 2002-2006 period 
would support a variety of grant programs to State and local 
governments in the Appalachian region. Of the total amount, $33 
million would be earmarked for technological and 
telecommunications initiatives, and State and local governments 
receiving those grants would be required to provide a match of 
between 20 percent and 50 percent. The bill also would 
authorize business incubator grants for developing and 
sustaining new technological or legal businesses and regional 
partnerships for promoting the development of job skills. 
Grants in those programs would require similar matching 
requirements. Any costs associated with receiving those grants 
would be voluntary.
Previous CBO Estimate
    On July 26, 2001, CBO transmitted a cost estimate for H.R. 
2501, the Appalachian Regional Development Reauthorization Act 
of 2001, as ordered reported by the House Committee on 
Transportation and Infrastructure on July 18, 2001. CBO 
estimates that implementing H.R. 2501 would cost $10 million 
more than S. 1206 over the 2002-2006 period because of 
differences in the authorizations of appropriations. In 
addition, the Senate bill includes a provision for a study of 
the economic impacts of the terrorist attacks on September 11, 
2001.

Estimate Prepared By: Federal Costs: Lanette J. Walker ; Impact 
on State, Local, and Tribal Governments: Leo Lex ; Impact on 
the Private Sector: Cecil McPherson.

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:
                              ----------                              

              APPALACHIAN REGIONAL DEVELOPMENT ACT OF 1965

                          (40 U.S.C. Appendix)

 AN ACT To provide public works and economic development programs and 
 the planning and coordination needed to assist in development of the 
                          Appalachian region.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Appalachian Regional Development Act 
of 1965''.

           *       *       *       *       *       *       *

                   findings and statement of purpose

    Sec. 2. (a) The Congress hereby finds and declares that the 
Appalachian region of the United States, while abundant in 
natural resources and rich in potential, lags behind the rest 
of the Nation in its economic growth and that its people have 
not shared properly in the Nation's prosperity. The region's 
uneven past development, with its historical reliance on a few 
basic industries and a marginal agriculture, has failed to 
provide the economic base that is a vital prerequisite for 
vigorous, self-sustaining growth. The State and local 
governments and the people of the region understand their 
problems and have been working and will continue to work 
purposefully toward their solution. The Congress recognizes the 
comprehensive report of the President's Appalachian Regional 
Commission documenting these findings and concludes that 
regionwide development is feasible, desirable, and urgently 
needed. It is, therefore, the purpose of this Act to assist the 
region in meeting its special problems, to promote its economic 
development, and to establish a framework for joint Federal and 
State efforts toward providing the basic facilities essential 
to its growth and attacking its common problems and meeting its 
common needs on a coordinated and concerted regional basis. The 
public investments made in the region under this Act shall be 
concentrated in areas where there is a significant potential 
for future growth, and where the expected return on public 
dollars invested will be the greatest. The States will be 
responsible for recommending local and State projects, within 
their borders, which will receive assistance under this Act. As 
the region obtains the needed physical and transportation 
facilities and develops its human resources, the Congress 
expects that the region will generate a diversified industry, 
and that the region will then be able to support itself, 
through the workings of a strengthened free enterprise economy.
    (b) The Congress further finds and declares that while 
substantial progress has been made toward achieving the 
foregoing purposes, especially with respect to the provision of 
essential public facilities, much remains to be accomplished, 
especially with respect to the provision of essential health, 
education, and other public services. The Congress recognizes 
that changes and evolving national purposes in the decade since 
1965 affect not only the Appalachian region, but also its 
relationship to a nation now assigning higher priority to 
conservation and the quality of life, values long cherished 
within the region. Appalachia now has the opportunity, in 
accommodating future growth and development, to demonstrate 
local leadership and coordinated planning so that housing, 
public services, transportation and other community facilities 
will be provided in a way congenial to the traditions and 
beauty of the region and compatible with conservation values 
and an enhanced quality of life for the people of the region. 
The Congress recognizes also that fundamental changes are 
occurring in national energy requirements and production, which 
not only risk short-term dislocations but will undoubtedly 
result in major long-term effects in the region. Consistent 
with the goal described in the preceding sentence, the 
Appalachian region should be able to take advantage of eco-
industrial development, which promotes both employment and 
economic growth and the preservation of natural resources. It 
is essential that the opportunities for expanded energy 
production be used so as to maximize the social and economic 
benefits and minimize social and environmental costs to the 
region and its people. it is, therefore, also the purpose of 
this Act to provide a framework for coordinating Federal, 
State, and local efforts toward (1) anticipating the effects of 
alternative energy policies and practices, (2) planning for 
accompanying growth and change so as to maximize the social and 
economic benefits and minimize social and environmental costs, 
and (3) implementing programs and projects carried out in the 
region by Federal, State, and local governmental agencies so as 
to better meet the special problems generated in the region by 
the Nation's energy needs and policies, including problems of 
transportation, housing, community facilities, and human 
services.
    (c) 1998 Findings and Purposes.--
            (1) Findings.--Congress further finds and declares 
        that, while substantial progress has been made in 
        fulfilling many of the objectives of this Act, rapidly 
        changing national and global economies over the past 
        decade have created new problems and challenges for 
        rural areas throughout the United States and especially 
        for the Appalachian region.
            (2) Purposes.--In addition to the purposes stated 
        in subsections (a) and (b), it is the purpose of this 
        Act--
                    (A) to assist the Appalachian region in--
                            (i) providing the infrastructure 
                        necessary for economic and human 
                        resource development;
                            (ii) developing the region's 
                        industry;
                            (iii) building entrepreneurial 
                        communities;
                            (iv) generating a diversified 
                        regional economy; and
                            (v) making the region's industrial 
                        and commercial resources more 
                        competitive in national and world 
                        markets;
                    (B) to provide a framework for coordinating 
                Federal, State, and local initiatives to 
                respond to the economic competitiveness 
                challenges in the Appalachian region through--
                            (i) improving the skills of the 
                        region's workforce;
                            (ii) adapting and applying new 
                        technologies for the region's 
                        businesses , including eco-industrial 
                        development technologies; and
                            (iii) improving the access of the 
                        region's businesses to the technical 
                        and financial resources necessary to 
                        development of the businesses; and
                    (C) to address the needs of severely and 
                persistently distressed areas of the 
                Appalachian region and focus special attention 
                on the areas of greatest need so as to provide 
                a fairer opportunity for the people of the 
                region to share the quality of life generally 
                enjoyed by citizens across the United States.

              TITLE I--THE APPALACHIAN REGIONAL COMMISSION

                         membership and voting

    Sec. 101. (a) In General.--
            (1) Establishment.--There is hereby established an 
        Appalachian Regional Commission (hereinafter referred 
        to as the ``Commission'') which shall be composed of 
        one Federal member, hereinafter referred to as the 
        ``Federal Cochairman,'' appointed by the President by 
        and with the advice and consent of the Senate, and one 
        member from each participating State in the Appalachian 
        region. The Federal Cochairman shall be one of the two 
        Cochairmen of the Commission. Each State member shall 
        be the Governor. The State members of the Commission 
        shall elect a Cochairman of the Commission from among 
        their number for a term of not less than one year.
            (2) Meetings.--
                    (A) In general.--The Commission shall 
                conduct at least 1 meeting each year with the 
                Federal Cochairman and at least a majority of 
                the State members present.
                    (B) Additional meetings.--The Commission 
                may conduct such additional meetings by 
                electronic means as the Commission considers 
                advisable, including meetings to decide matters 
                requiring an affirmative vote.
    (b) Except as provided in section 105, decisions by the 
Commission shall require the affirmative vote of the Federal 
Cochairman and of a majority of the State members (exclusive of 
members representing States delinquent under section 105). In 
matters coming before the Commission, the Federal Cochairman 
shall, to the extent practicable, consult with the Federal 
departments and agencies having an interest in the subject 
matter. A decision involving Commission policy, approval of any 
State, regional, or subregional development plan or 
[implementing investment program] strategy statement, any 
modification or revision of the Appalachian Regional Commission 
Code, any allocation of funds among the States, or any 
designation of a distressed county or an economically strong 
county shall not be made without a quorum of the State members. 
The approval of project and grant proposals shall be a 
responsibility of the Commission and exercised in accordance 
with section 303 of this Act.
    (c) Each State member may have a single alternate, 
appointed by the Governor from among the members of the 
Governor's cabinet or the Governor's personal staff. The 
President, by and with the advice and consent of the Senate, 
shall appoint an alternate for the Federal Cochairman. An 
alternate shall vote in the event of the absence, death, 
disability, removal, or resignation of the State or Federal 
representative for which he is an alternate. A State alternate 
shall not be counted toward the establishment of a quorum of 
the Commission in any instance in which a quorum of the State 
members is required. No Commission powers or responsibilities 
specified in the last two sentences of subsection (b) of this 
section, nor the vote of any Commission member, may be 
delegated to any person not a Commission member or who is not 
entitled to vote in Commission meetings.
    (d) The Federal Cochairman shall be compensated by the 
Federal Government at level III of the Executive Schedule in 
subchapter II of chapter 53 of the title V, United States Code. 
His alternate shall be compensated by the Federal Government at 
level V of such Executive Schedule, and when not actively 
serving as an alternate for the Federal Cochairman, shall 
perform such functions and duties as are delegated to him by 
the Federal Cochairman. Each State member and his alternate 
shall be compensated by the State which they represent at the 
rate established by law of such State.

                      functions of the commission

    Sec. 102. (a) In carrying out the purposes of this Act, the 
Commission shall--
            (1) develop, on a continuing basis, comprehensive 
        and coordinated plans and programs and establish 
        priorities thereunder, giving due consideration to 
        other Federal, State, and local planning in the region;
            (2) conduct and sponsor investigations, research, 
        and studies, including an inventory and analysis of the 
        resources of the region, and, in cooperation with 
        Federal, State, and local agencies, sponsor 
        demonstration projects designed to foster regional 
        productivity and growth;
            (3) review and study, in cooperation with the 
        agency involved, Federal, State, and local public and 
        private programs and, where appropriate, recommend 
        modifications or additions which will increase their 
        effectiveness in the region;
            (4) formulate and recommend, where appropriate, 
        interstate compacts and other forms of interstate 
        cooperation, and work with State and local agencies in 
        developing appropriate model legislation;
            (5) encourage the formation of , and support, local 
        development districts;
            (6) encourage private investment in industrial, 
        commercial, and recreational projects;
            (7) serve as a focal point and coordinating unit 
        for Appalachian programs; [and]
            (8) provide a forum for consideration of problems 
        of the region and proposed solutions and establish and 
        utilize, as appropriate, citizens and special advisory 
        councils and public conferences[.]
            (9) encourage the use of eco-industrial development 
        technologies and approaches; and
            (10) seek to coordinate the economic development 
        activities of, and the use of economic development 
        resources by, Federal agencies in the region.
    (b) In carrying out its functions under this section, the 
Commission shall identify the characteristics of, and may 
distinguish between the needs and goals of appropriate 
subregional areas, including central, northern, and southern 
Appalachia.

                            recommendations

    Sec. 103. The Commission may, from time to time, make 
recommendations to the President and to the State Governors and 
appropriate local officials with respect to--
            (1) the expenditure of funds by Federal, State, and 
        local departments and agencies in the region in the 
        fields of natural resources, agriculture, education, 
        training, health and welfare, and other fields related 
        to the purposes of this Act; and
            (2) such additional Federal, State, and local 
        legislation or administrative actions as the Commission 
        deems necessary to further the purposes of this Act.

         liaison between federal government and the commission

    Sec. 104. [The President] (a) In General._The President 
shall provide effective and continuing liaison between the 
Federal Government and the Commission and a coordinated review 
within the Federal Government of the plans and recommendations 
submitted by the Commission pursuant to sections 102 and 103.
    (b) Interagency Coordinating Council on Appalachia.--
            (1) Establishment.--In carrying out subsection (a), 
        the President shall establish an interagency council to 
        be known as the ``Interagency Coordinating Council on 
        Appalachia'.
            (2) Membership.--The Council shall be composed of--
                    (A) the Federal Cochairman, who shall serve 
                as Chairperson of the Council; and
                    (B) representatives of Federal agencies 
                that carry out economic development programs in 
                the region.

               administrative expenses of the commission

    Sec. 105. Administrative expenses of the Commission shall 
be paid 50 per centum by the Federal Government and 50 per 
centum by the States in the region, except that the expenses of 
the Federal Cochairman, his alternate, and his staff shall be 
paid solely by the Federal Government. The share to be paid by 
each State shall be determined by the Commission. The Federal 
Cochairman shall not participate or vote in such determination. 
No assistance authorized by this Act shall be furnished to any 
State or to any political subdivision or any resident of any 
State, nor shall the State member of the Commission participate 
or vote in any determination by the Commission while such State 
is delinquent in payment of its share of such expenses.

                  administrative powers of commission

    Sec. 106. To carry out its duties under this Act, the 
Commission is authorized to--
            (1) adopt, amend, and repeal bylaws, rules, and 
        regulations governing the conduct of its business and 
        the performance of its functions.
            (2) appoint and fix the compensation of an 
        executive director and such other personnel as may be 
        necessary to enable the Commission to carry out its 
        functions, except that such compensation shall not 
        exceed the maximum rate of basic pay for the Senior 
        Executive Service under section 5382 of title 5, United 
        States Code, including any applicable locality-based 
        comparability payment that may be authorized under 
        section 5304(h)(2)(C) of that title. The executive 
        director shall be responsible for carrying out the 
        administrative functions of the Commission, for 
        direction of the Commission staff, and for such other 
        duties as the Commission may assign. No member, 
        alternate, officer, or employee of the Commission, 
        other than the Federal Cochairman on the Commission, 
        his staff, and his alternate and Federal employees 
        detailed to the Commission under paragraph (3) shall be 
        deemed a Federal employee for any purpose.
            (3) request the head of any Federal department or 
        agency (who is hereby so authorized) to detail to 
        temporary duty with the Commission such personnel 
        within his administrative jurisdiction as the 
        Commission may need for carrying out its functions, 
        each such detail to be without loss of seniority, pay, 
        or other employee status.
            (4) arrange for the services of personnel from any 
        State or local government or any subdivision or agency 
        thereof, or any intergovernmental agency.
            (5) make arrangements, including contracts, with 
        any participating State government for inclusion in a 
        suitable retirement and employee benefits system of 
        such of its personnel as may not be eligible for, or 
        continue in, another governmental retirement or 
        employee benefit system, or otherwise provide for such 
        coverage of its personnel. The Civil Service Commission 
        of the United States is authorized to contract with the 
        Commission for continued coverage of Commission 
        employees, who at date of Commission employment are 
        Federal employees, in the retirement program and other 
        employee benefit programs of the Federal Government.
            (6) accept, use, and dispose of gifts or donations 
        of services or property, real, personal, or mixed, 
        tangible or intangible.
            (7) enter into and perform such contracts, leases 
        (including notwithstanding any other provision of law, 
        the lease of office space for any term [expiring no 
        later than September 30, 2001]), cooperative 
        agreements, or other transactions as may be necessary 
        in carrying out its functions and on such terms as it 
        may deem appropriate, with any department, agency, or 
        instrumentality of the United States (which is hereby 
        so authorized to the extent not otherwise prohibited by 
        law) or with any State, or any political subdivision, 
        agency, or instrumentality thereof, or with any person, 
        firm, association, or corporation.
            (8) maintain a temporary office in the District of 
        Columbia and establish a permanent office at such a 
        central and appropriate location as it may select and 
        field offices as such other places as it may deem 
        appropriate.
            (9) take such other actions and incur such other 
        expenses as may be necessary or appropriate.

                              information

    Sec. 107. (a) In order to obtain information needed to 
carry out its duties, the Commission shall--
            (1) hold such hearings, sit and act at such time 
        and places, take such testimony, receive such evidence, 
        and print or otherwise reproduce and distribute so much 
        of its proceedings and reports thereon as it may deem 
        advisable, a Cochairman of the Commission, or any 
        member of the Commission designated by the Commission 
        for the purpose, being hereby authorized to administer 
        oaths when it is determined by the Commission that 
        testimony shall be taken or evidence received under 
        oath;
            (2) arrange for the head of any Federal, State, or 
        local department or agency (who is hereby so authorized 
        to the extent not otherwise prohibited by law) to 
        furnish to the Commission such information as may be 
        available to or procurable by such department or 
        agency; and
            (3) keep accurate and complete records of its 
        doings and transactions which shall be made available 
        for public inspection, and for the purposes of audit 
        and examination by the Comptroller General or his duly 
        authorized representatives.
    (b) Public participation in the development, revision, and 
implementation of all plans and programs under this Act by the 
Commission, any State or any local development district shall 
be provided for, encouraged, and assisted. The Commission shall 
develop and publish regulations specifying minimum guidelines 
for such public participation, including public hearings.

                      personal financial interests

    Sec. 108. (a) Except as permitted by subsection (b) hereof, 
no State member or alternate and no officer or employee of the 
Commission shall participate personally and substantially as 
member, alternate, officer, or employee, through decision, 
approval, disapproval, recommendation, the rendering of advice, 
investigation, or otherwise, in any proceeding, application, 
request for a ruling or other determination, contract, claim, 
controversy, or other particular matter in which, to his 
knowledge, he, his spouse, minor child, partner, organization 
(other than a State or political subdivision thereof) in which 
he is serving as officer, director, trustee, partner, or 
employee, or any person or organization with whom he is serving 
as officer, director, trustee, partner, or employee, or any 
person or organization with whom he is negotiating or has any 
arrangement concerning prospective employment, has a financial 
interest. Any person who shall violate the provisions of this 
subsection shall be fined not more than $10,000, or imprisoned 
not more than two years, or both.
    (b) Subsection (a) hereof shall not apply if the State 
member, alternate, officer, or employee first advises the 
Commission of the nature and circumstances of the proceeding, 
application, request for a ruling or other determination, 
contract, claim, controversy, or other particular matter and 
makes full disclosure of the financial interest and receives in 
advance a written determination made by the Commission that the 
interest is not so substantial as to be deemed likely to affect 
the integrity of the services which the Commission may expect 
from such State member, alternate, officer, or employee.
    (c) No State member or alternate shall receive any salary, 
or any contribution to or supplementation of salary for his 
services on the Commission from any source other than his 
State. No person detailed to serve the Commission under 
authority of paragraph (4) of section 106 shall receive any 
salary or any contribution to or supplementation of salary for 
his services on the Commission from any source other than the 
State, local, or intergovernmental department or agency from 
which he was detailed or from the Commission. Any person who 
shall violate the provisions of this subsection shall be fined 
not more than $5,000, or imprisoned not more than one year, or 
both.
    (d) Notwithstanding any other subsection of this section, 
the Federal Cochairman or his alternate on the Commission and 
any Federal officers or employees detailed to duty with it 
pursuant to paragraph (3) of section 106 shall not be subject 
to any such subsections but shall remain subject to section 202 
through 209 of title 18, United States Code.
    (e) The Commission may, in its discretion, declare void and 
rescind any contract, loan, or grant of or by the Commission in 
relation to which it finds that there has been a violation of 
subsection (a) or (c) of this section, or any of the provisions 
of sections 202 through 209, title 18, United States Code.

                    commission employee protections

    Sec. 109. Section 5334(a) of title 5, United States Code, 
is amended by adding at the end thereof the following new 
sentence: ``For the purpose of this subsection, an individual 
employed by the Appalachian Regional Commission under section 
106(a) of the Appalachian Regional Development Act of 1965, or 
by a regional commission established pursuant to section 502 of 
the Public Works and Economic Development Act of 1965, under 
section 506(2) of such Act, who was a Federal employee 
immediately prior to such employment by a commission and within 
six months after separation from such employment is employed in 
a position to which this subchapter applies, shall be treated 
as if transferred from a position in the executive branch to 
which this subchapter does not apply.''

                 TITLE II--SPECIAL APPALACHIAN PROGRAMS

                          Part A--New Programs

                 Appalachian development highway system

    Sec. 201. (a) In order to provide a highway system which, 
in conjunction with the Interstate System and other Federal-aid 
highways in the Appalachian region, will open up an area or 
areas with a developmental potential where commerce and 
communication have been inhibited by lack of adequate access, 
the Secretary of Transportation (hereinafter in this section 
referred to as the ``Secretary'') is authorized to assist in 
the construction of an Appalachian development highway system 
and local access roads serving the Appalachian region. The 
provisions of section 106(a) and 118 of title 23, United States 
Code, relating to the obligation, period of availability, and 
expenditure of Federal-aid highway funds, shall apply to the 
development highway system and the local access roads, and all 
other provisions of such title 23 that are applicable to the 
construction and maintenance of Federal-aid primary and 
secondary highways and which the Secretary determines are not 
inconsistent with this Act shall apply, respectively, to such 
system and roads. Construction on the development highway 
system shall not exceed three thousand and twenty-five miles. 
\1\ Construction of local access roads shall not exceed one 
thousand four hundred miles that will serve specific 
recreational, residential, educational, commercial, industrial, 
or other like facilities or will facilitate a school 
consolidation program.
---------------------------------------------------------------------------
    \1\ The mileage of the highway system was increased from 2,900 to 
3,025 miles by section 138(b) of the Surface Transportation Assistance 
Act of 1978 (P.L. 95-599 approved November 6, 1978).
---------------------------------------------------------------------------
    (b) The Commission shall transmit to the Secretary its 
designations of (1) the general corridor location and termini 
of the development highways, (2) local access roads to be 
constructed, (3) priorities for the construction of segments of 
the development highways, and (4) other criteria for the 
program authorized by this section. Before any State member 
participates in or votes on such designations, he shall have 
obtained the recommendations of the State transportation 
department of the State which he represents.
    (c) In no event shall the Secretary assist in any 
construction (including right-of-way acquisition) which would 
require for its completion the expenditure of Federal funds 
(other than funds available under title 23, United States Code) 
in excess of the appropriations authorization in subsection 
(g). On its completion each development highway not already on 
the Federal-aid primary system shall be added to such system 
and each development highway and local access road shall be 
required to be maintained by the State as provided for Federal-
aid highways in title 23, United States Code.
    (d) In the construction of highways and roads authorized 
under this section, the States may give special preference to 
the use of materials and products indigenous to the Appalachian 
region.
    (e) For the purposes of research and development in the use 
of coal and coal products in highway construction and 
maintenance, the Secretary is authorized to require each, 
participating State, to the maximum extent possible, to use 
coal derivatives in the construction of not to exceed 10 per 
centum of the roads authorized under this Act.
    (f) Federal assistance to any construction project under 
this section shall not exceed 80 per centum of the costs of 
such project. \1\
---------------------------------------------------------------------------
    \1\ Subsection (f) of Section 201 was amended to permit Federal 
assistance from 50 percent to 80 percent by section 138(a) of the 
Surface Transportation Assistance Act of 1978 (P.L. 95-599 approved 
November 6, 1978).
---------------------------------------------------------------------------
    (g) To carry out this section there is hereby authorized to 
be appropriated to the President, to be available until 
expended, $175,000,000 for the fiscal year ending June 30, 
1971; $175,000,000 for the fiscal year ending June 30, 1972; 
$180,000,000 for the fiscal year ending June 30, 1973; 
$180,000,000 for the fiscal year ending June 30, 1974; 
$185,000,000 for the fiscal year ending June 30, 1975; 
$185,000,000 for the fiscal year ending June 30, 1976; 
$185,000,000 for the fiscal year ending June 30, 1977; 
$250,000,000 for the fiscal year 1978; $300,000,000 for the 
fiscal year 1979; $300,000,000 for the fiscal year 1980; and 
$215,000,000 for fiscal year 1981, and $65,000,000 for fiscal 
year 1982.
    (h)(1) When a participating State proceeds to construct a 
segment of a development highway without the aid of Federal 
funds, in accordance with all procedures and requirements 
applicable to the construction of segments of Appalachian 
development highways with such funds, except insofar as such 
procedures and requirements limit a State to the construction 
of projects for which Federal funds have previously been 
appropriated, the Secretary, upon application by the State and 
with the approval of the Commission, is authorized to pay to 
the State the Federal share not to exceed 80 per centum of the 
costs of the construction of such segment, from any sums 
appropriated and allocated to such State to carry out this 
section.
    (2) This subsection shall not be construed as a commitment 
or obligation on the part of the United States to provide funds 
for segments of development highways constructed under this 
subsection, and shall not increase the limitation on 
construction in subsection (c).

                     demonstration health projects

    Sec. 202. (a) In order to demonstrate the value of adequate 
health facilities and services to the economic development of 
the region, the Secretary of Health and Human Services is 
authorized to make grants for the planning, construction, 
equipment, and operation of multicounty demonstration health, 
nutrition, and child care projects, including hospitals, 
regional health diagnostic and treatment centers and other 
facilities and services necessary for the purposes of this 
section. Grants for such construction (including the 
acquisition of privately owned facilities not operated for 
profit, or previously operated for profit where the acquisition 
of such facilities is the most cost-effective means for 
providing increased health services if the Commission finds 
that but for the acquisition of such facility such health 
services would not be otherwise provided in the area served by 
such facility, and initial equipment) shall be made in 
accordance with section 223 of this Act and shall not be 
incompatible with the applicable provisions of [title VI of the 
Public Health Service Act (42 U.S.C. 291-291o), the Mental 
Retardation Facilities and Community Mental Health Centers 
Construction Act of 1963 (77 Stat. 282)] title VI of the Public 
Health Service Act (42 U.S.C. 291 et seq.), the Developmental 
Disabilities Assistance and Bill of Rights Act of 2000 (42 
U.S.C. 15001 et seq.), and other laws authorizing grants for 
the construction of health-related facilities, without regard 
to any provisions therein relating to appropriation 
authorization ceilings or to allotments among the States. 
Grants under this section shall be made solely out of funds 
specifically appropriated for the purpose of carrying out this 
Act and shall not be taken into account in the computation of 
the allotments among the States made pursuant to any other 
provision of law.
    (b) No grant for the construction or equipment of any 
component of a demonstration health project shall exceed 80 per 
centum of such costs. The Federal contribution may be provided 
entirely from funds authorized under this section or in 
combination with funds provided under other Federal [grant-in-
aid programs] grant programs for the construction or equipment 
of health-related facilities. Notwithstanding any provision of 
law limiting the Federal share in such other programs, funds 
authorized under this section may be used to increase Federal 
grants for component facilities of a demonstration health 
project to a maximum of 80 per centum of the costs of such 
facilities.
    (c) Grants under this section for operation (including 
initial operating funds and operating deficits comprising among 
other items the costs of attracting, training, and retaining 
qualified personnel) of a demonstration health project, whether 
or not constructed with funds authorized by this section, may 
be made for up to 50 percent of the costs of that operation (or 
80 percent of those costs in the case of a project to be 
carried out in a county for which a distressed county 
designation is in effect under section 226). The Federal 
contribution may be provided entirely from funds appropriated 
to carry out this section or in combination with funds provided 
under other Federal [grant-in-aid programs] grant programs for 
the operation of health related facilities and the provision of 
health and child development services, including title IV, 
parts A and B, and title XX of the Social Security Act. 
Notwithstanding any provision of the Social Security Act 
requiring assistance or services on a statewide basis, if a 
State provides assistance or services under such a program in 
any area of the region approved by the Commission, such State 
shall be considered as meeting such requirement. 
Notwithstanding any provision of law limiting the Federal share 
in such other programs, funds appropriated to carry out this 
section may be used to increase Federal grants for operating 
components of a demonstration health project to the maximum 
percentage cost thereof authorized by this subsection. No grant 
for operation of a demonstration health project shall be made 
unless the facility is publicly owned, or owned by a public or 
private nonprofit organization, and is not operated for profit. 
No grant for operation of a demonstration health project shall 
be made after five years following the commencement of the 
initial grant for operation of the project, that child 
development demonstrations assisted under this section during 
fiscal year 1979 may, upon State request, be approved under 
section 303 of this Act for continued support beyond that 
period if the Commission finds that no Federal, State, or local 
funds are available to continue such demonstrations. No such 
grants shall be made unless the Secretary of Health and Human 
Services is satisfied that the operation of the project will be 
conducted under efficient management practices designed to 
obviate operating deficits.
    (d) The Secretary of Health and Human Services is 
authorized to provide funds to the Commission for the support 
of its Health Advisory Committee and to make grants for 
expenses of planning necessary for the development and 
operation of demonstration health projects for the region. The 
amount of any such grant shall not exceed 75 per centum of such 
expenses. The Federal contribution to such expenses of planning 
may be provided entirely from funds authorized under this 
section or in combination with funds provided under other 
Federal or Federal [grant-in-aid programs] grant programs. 
Notwithstanding any provision of law limiting the Federal share 
in any such other program, funds appropriated to carry out this 
section may be used to increase such Federal share to the 
maximum percentage cost thereof authorized by this subsection.
    (e) In order to provide for the further development of the 
Appalachian region's human resources, grants under this section 
shall give special emphasis to programs and research for the 
early detection, diagnosis, and treatment of occupational 
diseases arising from coal mining, such as black lung.
    (f) Maximum Commission Contribution After September 30, 
1998.--
            (1) In general.--Subject to paragraph (2), after 
        September 30, 1998, a Commission contribution of not 
        more than 50 percent of any project cost eligible for 
        financial assistance under this section may be provided 
        from funds appropriated to carry out this Act.
            (2) Distressed counties.--In the case of a project 
        to be carried out in a county for which a distressed 
        county designation is in effect under section 226, the 
        maximum Commission contribution under paragraph (1) may 
        be increased to the lesser of--
                    (A) 80 percent; or
                    (B) the maximum Federal contribution 
                percentage authorized by this section.

    [Secs. 203-206 repealed by P.L. 105-393 (112 Stat. 3620).]

SEC. 203. TELECOMMUNICATIONS AND TECHNOLOGY INITIATIVE.

    (a) In General.--The Commission may provide technical 
assistance, make grants, enter into contracts, or otherwise 
provide funds to persons or entities in the region for 
projects--
            (1) to increase affordable access to advanced 
        telecommunications, entrepreneurship, and management 
        technologies or applications in the region;
            (2) to provide education and training in the use of 
        telecommunications and technology;
            (3) to develop programs to increase the readiness 
        of industry groups and businesses in the region to 
        engage in electronic commerce; or
            (4) to support entrepreneurial opportunities for 
        businesses in the information technology sector.
    (b) Source of Funding.--
            (1) In general.--Assistance under this section may 
        be provided--
                    (A) exclusively from amounts made available 
                to carry out this section; or
                    (B) from amounts made available to carry 
                out this section in combination with amounts 
                made available under any other Federal program 
                or from any other source.
            (2) Federal share requirements specified in other 
        laws.--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 
        determines to be appropriate.
    (c) Cost Sharing for Grants.--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 226) of the costs of any activity eligible for a 
grant under this section may be provided from funds 
appropriated to carry out this section.
    (d) Broadband Study.--
            (1) In general.--The Commission shall make a grant, 
        enter into an agreement, or otherwise provide funds for 
        the conduct of a study on--
                    (A) the availability of broadband 
                telecommunications services and access to the 
                Internet through such services in rural and 
                other remote areas;
                    (B) the impacts of the availability of 
                those services on those areas; and
                    (C) the means that are available for 
                enhancing or facilitating the availability of 
                those services in those areas.
            (2) Completion of study.--The study under paragraph 
        (1) shall be completed not later than 18 months after 
        the date of enactment of the Appalachian Regional 
        Development Act Amendments of 2001.

SEC. 204. ENTREPRENEURSHIP INITIATIVE.

    (a) Definition of 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) a legal service, including aid in preparing a 
        corporate charter, partnership agreement, or basic 
        contract;
            (2) a service in support of the protection of 
        intellectual property through a patent, a trademark, or 
        any other means;
            (3) a service in support of the acquisition and use 
        of advanced technology, including the use of Internet 
        services and Web-based services; and
            (4) consultation on strategic planning, marketing, 
        or advertising.
    (b) Projects To Be Assisted.--The Commission may provide 
technical assistance, make grants, enter into contracts, or 
otherwise provide funds to persons or entities in the region 
for projects--
            (1) to support the advancement of, and provide, 
        high-quality entrepreneurial training and education for 
        youths, students, and businesspersons;
            (2) to improve access to debt and equity capital, 
        including the establishment of development venture 
        capital funds;
            (3) to aid communities in identifying, developing, 
        and implementing development strategies for various 
        sectors of the economy; and
            (4)(A) to develop a working network of business 
        incubators; and
            (B) to support entities that provide business 
        incubator services.
    (c) Source of Funding.--
            (1) In general.--Assistance under this section may 
        be provided--
                    (A) exclusively from amounts made available 
                to carry out this section; or
                    (B) from amounts made available to carry 
                out this section in combination with amounts 
                made available under any other Federal program 
                or from any other source.
            (2) Federal share requirements specified in other 
        laws.--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 
        determines to be appropriate.
    (d) Cost Sharing for Grants.--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 226) of the costs of any activity eligible for a 
grant under this section may be provided from funds 
appropriated to carry out this section.

SEC. 205. REGIONAL SKILLS PARTNERSHIPS.

    (a) Definition of Eligible Entity.--In this section, the 
term ``eligible entity'' means a consortium that--
            (1) is established to serve 1 or more industries in 
        a specified geographic area; and
            (2) consists of representatives of--
                    (A) businesses (or a nonprofit organization 
                that represents businesses);
                    (B) labor organizations;
                    (C) State and local governments; or
                    (D) educational institutions.
    (b) Projects To Be Assisted.--The Commission may provide 
technical assistance, make grants, enter into contracts, or 
otherwise provide funds to eligible entities in the region for 
projects to improve the job skills of workers in a specified 
industry, including projects for--
            (1) the assessment of training and job skill needs 
        for the industry;
            (2) the development of curricula and training 
        methods, including, in appropriate cases, electronic 
        learning or technology-based training;
            (3) the purchase, lease, or receipt of donations of 
        training equipment;
            (4)(A) the identification of training providers; 
        and
            (B) the development of partnerships between the 
        industry and educational institutions, including 
        community colleges;
            (5) the development of apprenticeship programs;
            (6) the development of training programs for 
        workers, including dislocated workers; and
            (7) the development of training plans for 
        businesses.
    (c) Administrative Costs.--An eligible entity may use not 
more than 10 percent of the funds made available to the 
eligible entity under subsection (b) to pay administrative 
costs associated with the projects described in subsection (b).
    (d) Source of Funding.--
            (1) In general.--Assistance under this section may 
        be provided--
                    (A) exclusively from amounts made available 
                to carry out this section; or
                    (B) from amounts made available to carry 
                out this section in combination with amounts 
                made available under any other Federal program 
                or from any other source.
            (2) Federal share requirements specified in other 
        laws.--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 
        determines to be appropriate.
    (e) Cost Sharing for Grants.--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 226) of the costs of any activity eligible for a 
grant under this section may be provided from funds 
appropriated to carry out this section.

assistance for planning and other preliminary expenses of proposed low- 
                  and moderate-income housing projects

    Sec. 207. (a) In order to encourage and facilitate the 
construction of rehabilitation of housing to meet the needs of 
low- and moderate-income families and individuals, the 
Secretary of Housing and Urban Development (hereafter in this 
section referred to as the ``Secretary'') is authorized to make 
grants and loans from the Appalachian Housing Fund established 
by this section, under such terms and conditions as he may 
prescribe, to nonprofit, limited dividend, or cooperative 
organizations, and public bodies, for planning and obtaining 
federally insured mortgage financing or other financial 
assistance for housing construction or rehabilitation projects 
for low- and moderate-income families and individuals, under 
[section 221 of the National Housing Act, section 8 of the 
United States Housing Act of 1937, section 515 of the Housing 
Act of 1949] section 221 of the National Housing Act (12 U.S.C. 
1715l), section 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f), section 515 of the Housing Act of 1949 (42 
U.S.C. 1485), or any other law of similar purpose administered 
by the Secretary or any other department, agency, or 
instrumentality of the Federal or State government in any area 
of the Appalachian region determined by the Commission.
    (b) No loan under subsection (a) of this section shall 
exceed 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 226) of the cost of 
planning and obtaining financing for a project, including, but 
not limited to, preliminary surveys and analyses of market 
needs, preliminary site engineering and architectural fees, 
site options, applications and mortgage commitment fees, legal 
fees, and construction loan fees and discounts. Such loans 
shall be made without interest, except that any loan made to an 
organization established for profit shall bear interest at the 
prevailing market rate authorized for an insured or guaranteed 
loan for such project. The Secretary shall require payments of 
loans made under this section, under such terms and conditions 
as he may require, upon completion of the project or sooner, 
and except in the case of a loan to an organization established 
for profit, may cancel any part or all of such a loan, if he 
determines that a permanent loan to finance such project cannot 
be obtained in an amount adequate for repayment of such loan 
under this section.
    (c)(1) Except as provided in paragraph (2) of this 
subsection, no grant under this section shall exceed 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 226) of those expenses, incident to planning and 
obtaining financing for a project, which the Secretary 
considers not to be recoverable from the proceeds of any 
permanent loan made to finance such project, and no such grant 
shall, be made to an organization established for profit.
    (2) The Secretary is authorized to make grants and 
commitments for grants, and may advance funds under such terms 
and conditions as he may require, to nonprofit, limited 
dividend, or cooperative organizations and public bodies for 
reasonable site development costs and necessary offsite 
improvements, such as sewer and water line extensions, whenever 
such a grant, commitment, or advance is essential to the 
economic feasibility of any housing construction or 
rehabilitation project for low- and moderate-income families 
and individuals which otherwise meets the requirements for 
assistance under this section, except that no such grant for 
the construction of housing, shall exceed 10 per centum of the 
cost of such project, and no such grant for the rehabilitation 
of housing shall exceed 10 per centum of the reasonable value 
of such rehabilitation housing, as determined by the Secretary.
    (d) All funds allocated to the Secretary for the purposes 
of this section shall be deposited in a fund which shall be 
known as the Appalachian Housing Funds and shall be used as a 
revolving fund by the Secretary for carrying out such purposes. 
General expenses of administration of this section may be 
charged to the fund. Moneys in the fund not needed for current 
operation may be invested in bonds or other obligations 
guaranteed as to principal and interest by the United States.
    (e) The Secretary or the Commission may provide, or 
contract with public or private organizations to provide, 
information, advice, and technical assistance with respect to 
the construction, rehabilitation, and operation by nonprofit 
organizations of housing for low or moderate income families in 
such areas of the region and may provide funds to the State for 
making grants and loans to nonprofit, limited dividend, or 
cooperative organizations and public bodies for the purposes 
for which the Secretary is authorized to provide funds under 
this section.
    (f) Programs and projects assisted under this section shall 
be subject to the provisions cited in section 402 of the Act, 
notwithstanding such section, to the extent provided in the 
laws authorizing assistance for low- and moderate-income 
housing.

    [Sec. 208 repealed by P.L. 105-393 (112 Stat. 3621).]

    Part B--Supplementations and Modifications of Existing Programs

    [Sec. 211 \1\ repealed by P.L. 105-220 (112 Stat. 1059).]
---------------------------------------------------------------------------
    \1\ Amendments made to this section by section 214 of P.L. 105-393 
could not be executed because of the earlier repeal of this section by 
P.L. 105-220.

    [Sec. 212-213 repealed by P.L. 105-393 (112 Stat. 3621-
3622).]

         supplements to federal [grant-in-aid] grant  programs

    Sec. 214. (a) In order to enable the people, States, and 
local communities of the region, including local development 
districts, to take maximum advantage of Federal [grant-in-aid 
programs] grant programs (as hereinafter defined) for which 
they are eligible but for which, because of their economic 
situation, they cannot supply the required matching share, or 
for which there are insufficient funds available under the 
Federal [grant-in-aid Act] Act authorizing such programs to 
meet pressing needs of the region, the Federal Cochairman may 
use amounts made available to carry out this section for all or 
any portion of the basic Federal contribution to projects or 
activities (hereinafter referred to as projects) under such 
Federal [grant-in-aid programs] grant programs authorized by 
Federal [grant-in-aid Acts] Acts, and for the purpose of 
increasing the Federal contribution to projects under such 
programs, as hereafter defined, above the fixed maximum portion 
of the cost of such projects otherwise authorized by the 
applicable law. In the case of any program or project for which 
all or any portion of the basic Federal contribution to the 
project under a Federal [grant-in-aid program] grant program is 
proposed to be made under this subsection, no such Federal 
contribution shall be made until the responsible Federal 
official administering the Federal [grant-in-aid Act] Act 
authorizing such contribution certifies that such program or 
project meets the applicable requirements of such Federal 
[grant-in-aid Act] Act and could be approved for Federal 
contribution under such Act if funds were available under such 
Act for such program or project. [Funds may be provided for 
programs and projects in a State under this subsection only if 
the Commission determines that the level of Federal and State 
financial assistance under Acts other than this Act, for the 
same type of programs or projects in that portion of the State 
within the region, will not be diminished in order to 
substitute funds authorized by this subsection.] Funds provided 
pursuant to this Act shall be available without regard to any 
limitations on areas eligible for assistance or authorizations 
for appropriation in any other Act. Any findings, report, 
certification, or documentation required to be submitted to the 
head of the department, agency, or instrumentality of the 
Federal Government responsible for the administration of any 
Federal [grant-in-aid program] grant program shall be accepted 
by the Federal Cochairman with respect to a supplemental grant 
for any project under such program.
    (b) Cost Sharing.--
            (1) In general.--The Federal portion of such costs 
        shall not be increased in excess of the percentage 
        established by the Commission, and shall in no event 
        exceed 80 per centum thereof.
            (2) Maximum commission contribution after september 
        30, 1998.--
                    (A) In general.--Subject to subparagraph 
                (B), after September 30, 1998, a Commission 
                contribution of not more than 50 percent of any 
                project cost eligible for financial assistance 
                under this section may be provided from funds 
                appropriated to carry out this Act.
                    (B) Distressed counties.--In the case of a 
                project to be carried out in a county for which 
                a distressed county designation is in effect 
                under section 226, the maximum Commission 
                contribution under subparagraph (A) may be 
                increased to 80 percent.
    [(c) The term ``Federal grant-in-aid programs'' as used in 
this section means those Federal grant-in-aid programs 
authorized by this Act and Acts other than this Act for the 
acquisition or development of land, the construction or 
equipment of facilities, or other community or economic 
development or economic adjustment activities, including but 
not limited to grant-in-aid programs authorized by the 
following Acts: Federal Water Pollution Control Act; Watershed 
Protection and Flood Prevention Act; titles VI and XVI of the 
Public Health Services Act; Vocational Education Act of 1963 
\1\; Federal Airport Act; Airport and Airway Development Act of 
1970; part IV of title III of the Communications Act of 1934; 
title VI (part A) and VII of the Higher Education Act of 1965; 
Land and Water Conservation Fund Act of 1965; National Defense 
Education Act of 1958; Consolidated Farm and Rural Development 
Act; sections 201 and 209 of the Public Works and Economic 
Development Act of 1965; \2\ the housing repair program for 
homeowners authorized by section 1319 of title 42, United 
States Code; grants under the Indian Health Service Act (42 
Stat. 208); and title I of the Housing and Community 
Development Act of 1974. The term shall not include (A) the 
program for the construction of the development highway system 
authorized by section 201 of this Act or any program relating 
to highway or road construction authorized by title 23, United 
States Code or (B) any other program for which loans or other 
Federal financial assistance, except a [grant-in-aid program] 
grant program, is authorized by this or any other Act. For the 
purpose of this section, any sewage treatment works constructed 
pursuant to section 8(c) of the Federal Water Pollution Control 
Act without Federal grant-in-aid assistance under such section 
shall be regarded as if constructed with such assistance.]
---------------------------------------------------------------------------
    \1\ Probably should be ``Carl D. Perkins Vocational and Technical 
Education Act of 1998''. See section 3(g) of Public Law 105-332, which 
could not be executed because of an error made by section 4(e)(2) of 
Public Law 98-524.
    \2\ The amendment made by section 217(c)(2) of P.L. 105-393 struck 
out ``Titles I and IX of the Public Works and Economic Development Act 
of 1965''. The amendment should have struck ``titles . . . ''. This was 
executed to reflect the probable intent of Congress.
---------------------------------------------------------------------------
    (c) Definition of Federal Grant Program.--
            (1) In general.--In this section, the term 
        ``Federal grant program'' means any Federal grant 
        program authorized by this Act or any other Act that 
        provides assistance for--
                    (A) the acquisition or development of land;
                    (B) the construction or equipment of 
                facilities; or
                    (C) any other community or economic 
                development or economic adjustment activity.
            (2) Inclusions.--In this section, the term 
        ``Federal grant program'' includes a Federal grant 
        program such as a Federal grant program authorized by--
                    (A) the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1921 et seq.);
                    (B) the Land and Water Conservation Fund 
                Act of 1965 (16 U.S.C. 460l-4 et seq.);
                    (C) the Watershed Protection and Flood 
                Prevention Act (16 U.S.C. 1001 et seq.);
                    (D) the Carl D. Perkins Vocational and 
                Technical Education Act of 1998 (20 U.S.C. 2301 
                et seq.);
                    (E) the Federal Water Pollution Control Act 
                (33 U.S.C. 1251 et seq.);
                    (F) title VI of the Public Health Service 
                Act (42 U.S.C. 291 et seq.);
                    (G) sections 201 and 209 of the Public 
                Works and Economic Development Act of 1965 (42 
                U.S.C. 3141, 3149);
                    (H) title I of the Housing and Community 
                Development Act of 1974 (42 U.S.C. 5301 et 
                seq.); or
                    (I) part IV of title III of the 
                Communications Act of 1934 (47 U.S.C. 390 et 
                seq.).
            (3) Exclusions.--In this section, the term 
        ``Federal grant program'' does not include--
                    (A) the program for construction of the 
                Appalachian development highway system 
                authorized by section 201;
                    (B) any program relating to highway or road 
                construction authorized by title 23, United 
                States Code; or
                    (C) any other program under this Act or any 
                other Act to the extent that a form of 
                financial assistance other than a grant is 
                authorized.
    [(d) Not to exceed $97,000,000 of the funds authorized in 
section 401 of this Act for the two-fiscal-year period ending 
June 30, 1969, shall be available to carry out this section.]

                       Part C--General Provisions

                         maintenance of effort

    Sec. 221. No State and no political subdivision of such 
State shall be eligible to receive benefits under this Act 
unless the aggregate expenditures of State funds, exclusive of 
expenditures for participation in the National System of 
Interstate and Defense Highways, and exclusive of local funds 
and Federal funds, for the benefit of the area within the State 
located in the region are maintained at a level which does not 
fall below the average level of the last two years of when it 
finds that a State's average level of such expenditures for its 
last two full fiscal years preceding the date of enactment of 
this Act. In computing the average level of expenditure for its 
last two fiscal years, a State's past expenditure for 
participation in the National System of Interstate and Defense 
Highways and expenditures of local funds and Federal funds 
shall not be included. The Commission shall recommend to the 
President or such Federal officer or officers as the President 
may designate, a lesser requirement when it finds that a 
substantial population decrease in that portion of a State 
which lies within the region would not justify a State 
expenditure equal to the average level of expenditure, within 
an individual program, has been disproportionate to the present 
need for that portion of the State which lies within the 
region.

                           consent of states

    Sec. 222. Nothing contained in this Act shall be 
interpreted as requiring any State to engage in or accept any 
program under this Act without its consent.

                         program implementation

    Sec. 223. No program or project authorized under any 
section of this title shall be implemented until (1) 
applications and plans relating to the program or project have 
been determined by the responsible Federal official to be not 
incompatible with the provisions and objectives of Federal laws 
which he administers that are not inconsistent with this Act, 
and (2) the Commission has approved such program or project and 
has determined that it meets the applicable criteria under 
section 224 of this Act and the requirements of the development 
planning process under section 225, and will contribute to the 
development of the region, which determination shall be 
controlling and which shall be accepted by the Federal 
agencies.

                      program development criteria

    Sec. 224. (a) In considering programs and projects to be 
given assistance under this Act, and in establishing a priority 
ranking of the requests for assistance presented to the 
Commission, the Commission shall follow procedures that will 
insure consideration of the following factors:
            (1) the relationship of the project or class of 
        projects to overall regional development including its 
        location [in an area determined by the State have a 
        significant potential for growth or] in a severely and 
        persistently distressed county or area;
            (2) the population and area to be served by the 
        project or class of projects including the [relative 
        per capita income] per capita market income and the 
        unemployment rates in the area;
            (3) the relative financial resources available to 
        the State or political subdivision or instrumentalities 
        thereof which seek to undertake the project;
            (4) the importance of the project or class of 
        projects in relation to other projects or classes of 
        projects which may be competition for the same funds;
            (5) the prospects that the project for which 
        assistance is sought will improve, on a continuing 
        rather that a temporary basis, the opportunities for 
        employment, the average level of income, or the 
        economic and social development of the area served by 
        the project; and
            (6) the extent to which the project design provides 
        for detailed outcome measurements by which grant 
        expenditures may be evaluated.
    (b) Limitation.--Financial assistance made available under 
this Act shall not be used to assist establishments relocating 
from one area to another.
    (c) Funds may be provided for programs and projects in a 
State under this Act only if the Commission determines that the 
level of Federal and State financial assistance under Acts 
other than this Act for the same type of programs or projects 
in that portion of the State within the region, will not be 
diminished in order to substitute funds authorized by this Act.
    (d) Assistance to Distressed Counties and Areas.--For each 
fiscal year, not less than 50 percent of the amount of grant 
expenditures approved by the Commission shall support 
activities or projects that benefit severely and persistently 
distressed counties and areas.

             appalachian state development planning process

    Sec. 225. (a) Pursuant to policies established by the 
Commission, each State member shall submit on such schedule as 
the Commission shall prescribe a development plan for the area 
of the State within the region. The State development plan 
shall reflect the goals, objectives, and priorities identified 
in the regional development plan and in any subregional 
development plan which may be approved for the subregion of 
which such State is a part. Such State development plan shall 
(1) describe the State organization and continuous process for 
Appalachian development planning, including the procedures 
established by the State for the participation of local 
development districts in such process, the means by which such 
process is related to overall statewide planning and budgeting 
processes, and the method of coordinating planning and projects 
in the region under this Act, the Public Works and Economic 
Development Act of 1965, and other Federal, State, and local 
programs; (2) set forth the goals, objectives, and priorities 
of the State for the region, as determined by the Governor, and 
identify the needs on which such goals, objectives, and 
priorities are based; and (3) describe the [development 
program] development strategies for achieving such goals, 
objectives, and priorities, including funding sources, and 
recommendations for specific projects to receive assistance 
under this Act.
    (b)(1) Local development districts certified by the State 
under section 301 of this Act provide the linkage between State 
and substate planning and development. In carrying out the 
development planning process, including the selection of 
programs and projects for assistance, States shall consult with 
local development districts, local units of government, and 
citizen groups and take into consideration the goals, 
objectives, priorities, and recommendations of such bodies. The 
districts shall assist the States in the coordination of 
areawide programs and projects, and may prepare and adopt 
areawide plans or action programs.
    (2) The Commission shall encourage the preparation and 
execution of areawide action programs which specify 
interrelated projects and schedules of action together with the 
necessary agency fundings and other commitments to implement 
such programs. Such programs shall make appropriate use of 
existing plans affecting the area.
    (c) To the maximum extent practicable, Federal departments, 
agencies, and instrumentalities undertaking or providing 
financial assistance for programs or projects in the region 
shall (1) take into account the policies, goals, and objectives 
established by the Commission and its member States pursuant to 
this Act; (2) recognize Appalachian State [development 
programs] development strategies approved by the Commission as 
satisfying requirements for overall economic development 
planning under such programs or projects; and (3) accept the 
boundaries and organization of any local development district 
certified under this Act which the Governor may designate as 
the areawide agency required under any such program undertaken 
or assisted by such Federal departments, agencies, and 
instrumentalities.

SEC. 226. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

    (a) Designations.--
            (1) In general.--Not later than 90 days after the 
        date of enactment of this section, and annually 
        thereafter, the Commission, in accordance with such 
        criteria as the Commission may establish, shall--
                    (A) designate as ``distressed counties'' 
                those counties in the region that are the most 
                severely and persistently distressed; and
                    (B) designate 2 categories of economically 
                strong counties, consisting of--
                            (i) ``competitive counties'', which 
                        shall be those counties in the region 
                        that are approaching economic parity 
                        with the rest of the United States; and
                            (ii) `attainment counties', which 
                        shall be those counties in the region 
                        that have attained or exceeded economic 
                        parity with the rest of the United 
                        States.
            (2) Annual review of designations.--The Commission 
        shall--
                    (A) conduct an annual review of each 
                designation of a county under paragraph (1) to 
                determine if the county still meets the 
                criteria for the designation; and
                    (B) renew the designation for another 1-
                year period only if the county still meets the 
                criteria.
    (b) Distressed Counties.--In program and project 
development and implementation and in the allocation of 
appropriations made available to carry out this Act, the 
Commission shall give special consideration to the needs of 
those counties for which a distressed county designation is in 
effect under this section.
    (c) Economically Strong Counties.--
            (1) Competitive counties.--Except as provided in 
        paragraphs (3) and (4), in the case of a project that 
        is carried out in a county for which a competitive 
        county designation is in effect under this section, 
        assistance under this Act shall be limited to not more 
        than 30 percent of the project cost.
            (2) Attainment counties.--Except as provided in 
        paragraphs (3) and (4), no funds may be provided under 
        this Act for a project that is carried out in a county 
        for which an attainment county designation is in effect 
        under this section.
            (3) Exceptions.--The requirements of paragraphs (1) 
        and (2) shall not apply to--
                    (A) any project on the Appalachian 
                development highway system authorized by 
                section 201;
                    (B) any local development district 
                administrative project assisted under section 
                302(a)(1); or
                    (C) any multicounty project that is carried 
                out in 2 or more counties designated under this 
                section if--
                            (i) at least 1 of the participating 
                        counties is designated as a distressed 
                        county under this section; and
                            (ii) the project will be of 
                        substantial direct benefit to 1 or more 
                        distressed counties.
            (4) Waiver.--
                    (A) In general.--The Commission may waive 
                the requirements of paragraphs (1) and (2) for 
                a project upon a showing by the recipient of 
                assistance for the project of 1 or more of the 
                following:
                            (i) The existence of a significant 
                        pocket of distress in the part of the 
                        county in which the project is carried 
                        out.
                            (ii) The existence of a significant 
                        potential benefit from the project in 1 
                        or more areas of the region outside the 
                        designated county.
                    (B) Reports to congress.--The Commission 
                shall submit to the Committee on Environment 
                and Public Works of the Senate and the 
                Committee on Transportation and Infrastructure 
                of the House of Representatives an annual 
                report describing each waiver granted under 
                subparagraph (A) during the period covered by 
                the report.

                       TITLE III--ADMINISTRATION

               local development districts--certification

    Sec. 301. For the purposes of this Act, a ``local 
development district'' shall be an entity certified to the 
Commission either by the Governor of the State or States in 
which such entity is located, or by the State officer 
designated by the appropriate State Law to make such 
certification, as having a charter or authority that includes 
the economic development of counties or parts of counties or 
other political subdivisions within the region. No entity shall 
be certified as a local development district for the purposes 
of this Act unless it is one of the following:
            (1) a nonprofit incorporated body organized or 
        chartered under the law of the State in which it is 
        located;
            (2) a nonprofit agency or instrumentality of a 
        State or local government;
            (3) a nonprofit agency or instrumentality created 
        through an interstate compact; or
            (4) a nonprofit association or combination of such 
        bodies, agencies, and instrumentalities.

 grants for administration expenses of local development districts and 
                for research and demonstration projects

    Sec. 302. (a) Authorization To Make Grants.--
            (1) In general.--The Commission is authorized--
                    (A) to make grants 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 any such grant 
                shall not exceed 50 percent of such expenses 
                (or, at the discretion of the Commission, 75 
                percent of such expenses in the case of 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 226), (ii) no grants for 
                administrative expenses shall be made for a 
                State agency certified as a local development 
                district for a period in excess of three years 
                beginning on the date the initial grant is made 
                for such development district, and (iii) the 
                local development district contributions for 
                administrative expenses may be in cash or in 
                kind, fairly evaluated, including but not 
                limited to space, equipment, and services;
                    (B) to make grants for assistance to States 
                for a period not in excess of two years to 
                strengthen the State development planning 
                process for the region and the coordination of 
                State planning under this Act, the Public Works 
                and Economic Development Act of 1965, as 
                amended, and other Federal and State programs; 
                and
                    (C) to make grants for investigation, 
                research, studies, evaluations, and assessments 
                of needs, potentials, or attainment of the 
                people of the region, technical assistance, 
                training programs, demonstrations, and the 
                construction of necessary facilities incident 
                to such activities, which will further the 
                purposes of this Act. Grant funds may be 
                provided entirely from appropriations to carry 
                out this section or in combination with funds 
                available under other Federal or Federal 
                [grant-in-aid programs] grant programs or from 
                any other source. Notwithstanding any provision 
                of law limiting the Federal share in any such 
                other program, funds appropriated to carry out 
                this section may be used to increase such 
                Federal share, as the Commission determines 
                appropriate.
            (2) Cost sharing after september 30, 1998.--
                    (A) In general.--Except as provided in 
                subparagraph (B), after September 30, 1998, 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 226) of the costs of any 
                activity eligible for financial assistance 
                under this section may be provided from funds 
                appropriated to carry out this Act.
                    (B) Discretionary grants.--
                            (i) In general.--Discretionary 
                        grants made by the Commission to 
                        implement significant regional 
                        initiatives, to take advantage of 
                        special development opportunities, or 
                        to respond to emergency economic 
                        distress in the region may be made 
                        without regard to the percentage 
                        limitations specified in subparagraph 
                        (A).
                            (ii) Limitation on aggregate 
                        amount.--For each fiscal year, the 
                        aggregate amount of discretionary 
                        grants referred to in clause (i) shall 
                        not exceed 10 percent of the amounts 
                        appropriated under section 401 for the 
                        fiscal year.h
    (b)(1) The Commission may provide assistance under this 
section for demonstrations of enterprise development, including 
site acquisition or development where necessary for the 
feasibility of the project, in connection with the development 
of the region's energy resources and the development and 
stimulation of indigenous arts and crafts of the region. No 
more than $3,000,000 shall be obligated for such energy 
resource related demonstrations in any fiscal year, and no more 
than $2,500,000 shall be obligated for such indigenous arts and 
crafts demonstrations.
    (2) In carrying out the purpose of this Act, including 
section 2(b), and in implementing this section, the Secretary 
of Energy, the Environmental Protection Agency, and other 
Federal agencies shall cooperate with the Commission and shall 
provide such assistance as the Federal Cochairman may request.
    (c)(1) The Commission shall, as required by the President, 
maintain accurate and complete records of transactions and 
activities financed with Federal funds and report thereon to 
the President. The records of the Commission shall be available 
for audit with respect to such grants by the President and the 
Comptroller General or their duly authorized representatives.
    (2) Recipients of Federal assistance under the provisions 
of this section shall, as required by the Commission, maintain 
accurate and complete records of transactions and activities 
financed with Federal funds and reports thereon to the 
Commission. Such records shall be available for audit by the 
President, Comptroller General, and the Commission or their 
duly authorized representatives.

     approval of development plans, [investment programs] strategy 
                        statements, and projects

    Sec. 303. State and Regional Development Plans and 
[implementing investments programs] strategy statements, and 
any multistate subregional plans which may be developed, shall 
be annually reviewed and approved by the Commission in 
accordance with section 101(b) of this Act. An application for 
a grant or for any other assistance for a specific project 
under this Act shall be made through the State member of the 
Commission representing such applicant, and such State member 
shall evaluate the application for approval. Only applications 
for grants or other assistance for specific projects shall be 
approved which are certified by the State member and determined 
by the Federal Cochairman to implement the Commission-approved 
State development plan; to be included in the Commission-
approved [implementing investment program] strategy statement; 
to have adequate assurance that the project will be properly 
administered, operated, and maintained; and to otherwise meet 
the requirements for assistance under this Act. After the 
approval of the appropriate State development plan and 
[implementing investment program] strategy statement, 
certification by a State member of an application for a grant 
or other assistance for a specific project pursuant to this 
section shall, when joined by an affirmative vote of the 
Federal Cochairman for such project, be deemed to satisfy the 
requirements for affirmative votes for decisions under section 
101(b) of this Act.

                             annual report

    Sec. 304. Not later than six months after the close of each 
fiscal year, the Commission shall prepare and submit to the 
Governor of each State in the region and to the President, for 
transmittal to the Congress, a report on the activities carried 
out under this Act during such year.

         TITLE IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS

[SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

    [(a) In General.--In addition to amounts authorized by 
section 201 and other amounts made available for the 
Appalachian development highway system program, there are 
authorized to be appropriated to the Commission to carry out 
this Act--
            [(1) $68,000,000 for fiscal year 1999;
            [(2) $69,000,000 for fiscal year 2000; and
            [(3) $70,000,000 for fiscal year 2001.
    [(b) Availability.--Sums made available under subsection 
(a) shall remain available until expended.]

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--In addition to amounts authorized by 
section 201 and other amounts made available for the 
Appalachian development highway system program, there are 
authorized to be appropriated to the Commission to carry out 
this Act--
            (1) $88,000,000 for each of fiscal years 2002 
        through 2004;
            (2) $90,000,000 for fiscal year 2005; and
            (3) $92,000,000 for fiscal year 2006.
    (b) Telecommunications and Technology Initiative.--Of the 
amounts made available under subsection (a), the following 
amounts may be made available to carry out section 203:
            (1) $10,000,000 for fiscal year 2002.
            (2) $8,000,000 for fiscal year 2003.
            (3) $5,000,000 for each of fiscal years 2004 
        through 2006.
    (c) Availability.--Sums made available under subsection (a) 
shall remain available until expended.

                       applicable labor standards

    Sec. 402. All laborers and mechanics employed by 
contractors or subcontractors in the construction, alteration, 
or repair, including painting and decorating, of projects, 
buildings and works which are financially assisted through the 
Federal funds authorized under this Act, shall be paid wages at 
rates not less than those prevailing or similar construction in 
the locality as determined by the Secretary of Labor in 
accordance with the Davis-Bacon Act, as amended (40 U.S.C. 
276a--276a-5). The Secretary of Labor shall have with respect 
to such labor standards, the authority and functions set forth 
in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176, 64 
Stat. 1267, 5 U.S.C. 133--133z-15), and section 2 of the Act of 
June 13, 1934, as amended (48 Stat. 948, as amended; 40 U.S.C. 
276(c)).

                    definition of appalachian region

    Sec. 403. As used in this Act, the term ``Appalachian 
region'' or ``the region'' means that area of the eastern 
United States consisting of the following counties (including 
any political subdivision located within such area):
            In Alabama, the counties of Bibb, Blount, Calhoun, 
        Chambers, Cherokee, Chilton, Clay, Cleburne, Colbert, 
        Coosa, Cullman, De Kalb, Elmore, Etowah, Fayette, 
        Franklin, Hale, Jackson, Jefferson, Lamar, Lauderdale, 
        Lawrence, Limestone, Macon, Madison, Marion, Marshall, 
        Morgan, Pickens, Randolph, Saint Clair, Shelby, 
        Talladega, Tallapoosa, Tuscaloosa, Walker, and Winston;
            In Georgia, the counties of Banks, Barrow, Bartow, 
        Carroll, Catoosa, Chattooga, Cherokee, Dade, Dawson, 
        Douglas, Elbert, Fannin, Floyd, Forsyth, Franklin, 
        Gilmer, Gordon, Gwinnett, Habersham, Hall, Haralson, 
        Hart, Heard, Jackson, Lumpkin, Madison, Murray, 
        Paulding, Pickens, Polk, Rabun, Stephens, Towns, Union, 
        Walker, White, and Whitfield;
            In Kentucky, the counties of Adair, Bath, Bell, 
        Boyd, Breathitt, Carter, Casey, Clark, Clay, Clinton, 
        Cumberland, Elliott, Estill, Fleming, Floyd, Garrard, 
        Green, Greenup, Harlan, Jackson, Johnson, Knott, Knox, 
        Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Lincoln, 
        McCreary, Madison, Magoffin, Martin, Menifee, Monroe, 
        Montgomery, Morgan, Owsley, Perry, Pike, Powell, 
        Pulaski, Rockcastle, Rowan, Russell, Wayne, Whitley, 
        and Wolfe;
            In Maryland, the counties of Allegany, Garrett, and 
        Washington;
            In Mississippi the counties of Alcorn, Benton, 
        Calhoun, Chickasaw, Choctaw, Clay, Itawamba, Kemper, 
        Lee, Lowndes, Marshall, Monroe, Noxubee, Oktibbeha 
        Pontotoc, Prentiss, Tippah, Tishomingo, Union, Webster, 
        Winston, and Yalobusha;
            In New York, the counties of Allegany, Broome, 
        Cattaraugus, Chautauqua, Chemung, Chenango, Cortland, 
        Delaware, Otsego, Schoharie, Schuyler, Steuben, Tioga, 
        and Tompkins;
            In North Carolina, the counties of Alexander, 
        Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, 
        Cherokee, Clay, Davie, Forsyth, Graham, Haywood, 
        Henderson, Jackson, McDowell, Macon, Madison, Mitchell, 
        Polk, Rutherford, Stokes, Surry, Swain, Transylvania, 
        Watauga, Wilkes, Yadkin, and Yancey;
            In Ohio, the counties of Adams, Athens, Belmont, 
        Brown, Carroll, Clermont, Columbiana, Coshocton, 
        Gallia, Guernsey, Harrison, Highland, Hocking, Holmes, 
        Jackson, Jefferson, Lawrence, Meigs, Monroe, Morgan, 
        Muskingum, Noble, Perry, Pike, Ross, Scioto, 
        Tuscarawas, Vinton, and Washington;
            In Pennsylvania, the counties of Allegheny, 
        Armstrong, Beaver, Bedford, Blair, Bradford, Butler, 
        Cambria, Cameron, Carbon, Centre, Clarion, Clearfield, 
        Clinton, Columbia, Crawford, Elk, Erie, Fayette, 
        Forest, Fulton, Greene, Huntingdon, Indiana, Jefferson, 
        Juniata, Lackawana, Lawrence, Luzerne, Lycoming, 
        McKean, Mercer, Mifflin, Monroe, Montour, 
        Northumberland, Perry, Pike, Potter, Schuylkill, 
        Snyder, Somerset, Sullivan, Susquehanna, Tioga, Union, 
        Venango, Warren, Washington, Wayne, Westmoreland, and 
        Wyoming;
            In South Carolina, the counties of Anderson, 
        Cherokee, Greenville, Oconee, Pickens, and Spartanburg;
            In Tennessee, the counties of Anderson, Bledsoe, 
        Blount, Bradley, Campbell, Cannon, Carter, Claiborne, 
        Clay, Cocke, Coffee, Cumberland, De Kalb, Fentress, 
        Franklin, Grainger, Greene, Grundy, Hamblen, Hamilton, 
        Hancock, Hawkins, Jackson, Jefferson, Johnson, Knox, 
        Loudon, McMinn, Macon, Marion, Meigs, Monroe, Morgan, 
        Overton, Pickett, Polk, Putnam, Rhea, Roane, Scott, 
        Sequatchie, Sevier, Smith, Sullivan, Unicoi, Union, Van 
        Buren, Warren, Washington, and White;
            In Virginia, the counties of Alleghany, Bath, 
        Bland, Botetourt, Buchanan, Carroll, Craig, Dickenson, 
        Floyd, Giles, Grayson, Highland, Lee, Montgomery, 
        Pulaski, Rockbridge, Russell, Scott, Smyth, Tazewell, 
        Washington, Wise, and Wythe;
            All counties of West Virginia.
    No recommendation for any change in the definition of the 
Appalachian region as set forth in this section shall be 
proposed or considered by the Commission without a prior 
resolution by the Committee on Environment and Public Works of 
the Senate or the [Committee on Public Works and 
Transportation] Committee on Transportation and Infrastructure 
of the House of Representatives, directing a study of such 
change.
    The President is authorized and directed to make a study of 
the extent to which portions of upper New York State which are 
geographically part of the New England region or the 
Appalachian region and share the social and economic 
characteristics thereof should be included in either of such 
regions. He shall submit the results of such study together 
with his recommendations to Congress not later than [June 30, 
1970] September 30, 2002.

                              severability

    Sec. 404. If any provision of this Act, or the 
applicability thereof to any person or circumstance, is held 
invalid, the remainder of this Act, and the application of such 
provision to other persons or circumstances, shall not be 
affected thereby.

                              termination

    Sec. 405. This Act, other than sections 201 and 403, shall 
cease to be in effect on October 1, [2001] 2006.

                                  
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