****
**January–February 1997**

**Table of Contents**Commission Members Hold Annual Quorum Meeting
- The View from ARC Leadership . . .  New Policies Improve J-1 Waiver ProgramPresident Proposes Budget Increase for ARC Programs
- Clinton Budget Funds Development Activities  Commission Announces Changes in PersonnelARC Notes
- LDDs Plan Annual March Conference  Commission Project Promotes RegionalismStrategy Statements Outline State Priorities for ARC Funds
- ARC Achievements for FY 1996  Commission Launches Community Capacity ProjectARC Moves Forward on Entrepreneurship
- Appalachian Schools to Gain Internet Access  DDAA to Sponsor Technology WorkshopUpcoming Activities
**Commission Members Hold Annual Quorum Meeting**
At its annual quorum meeting of Appalachian governors and the federal co-chairman, theAppalachian Regional Commission unanimously adopted the FY 1997 state strategy statementsthat implement the Commission's strategic plan for the Region, examined the Region's progress inthe past year, and discussed transportation issues with Transportation Secretary-designateRodney Slater. 

"These strategy statements reflect the spirit of collaboration and dedication in implementing the new strategic plan that we adopted in this very room a year ago," said ARC Federal Co-Chairman Jesse L. White Jr., who jointly presided over the February 2 meeting with States' Co-Chairman Kirk Fordice, governor of Mississippi.

"The 13 states, our 69 local development districts, and our federal office have workedshoulder-to-shoulder in this process. What we have achieved is to give structure to ourinvestments while actually expanding state flexibility," added White.

**Local Decisions**Governor Fordice reminded Commission members of the importance of input from local partnersin investing in the Region. "While we on the state and federal levels have an importantresponsibility to fulfill, ultimately progress throughout Appalachia will be driven andaccomplished by local leaders. We should provide the leadership and vision in a supporting role tothe progressive people who are determined to build better communities."

**Transportation** Secretary Slater stressed his commitment to continue working with the Appalachian states to completethe Appalachian Development Highway System.

"It has been our desire to really bring our partnership to you where you live andhave your hopes and aspirations, to ensure that your transportation system for your state and forthis region collectively, and for our nation, is the best in the world," he said.

Federal Co-Chairman White told Commission members that the Clinton administration willbe proposing a major initiative to speed up funding for the completion of the system throughISTEA reauthorization.

In other action, Commission members voted to approve revisions to the highway chapter ofthe ARC Code.

**Grant Cycle**In addition to approving the strategy statements for FY 1997, Commission members approveda more flexible approval cycle for future submission of strategy statements. This will allowprojects to be funded at the beginning of the fiscal year.

Virginia Governor George Allen strongly supported the idea. "I think this accelerated schedule is a great idea. It can save up to maybe five months and move these projects forward. And these are important projects, especially when you�re dealing with economic development matters."

In a broad-ranging discussion of the Region�s needs, several governors stressed the role of ARC funds in promoting local economic growth. Said Tennessee Governor Don Sundquist, "The Appalachian Regional Commission is critical to what we�re trying to accomplish in the eastern part of our state where we do have some isolated . . . poor counties."

Other governors at the session were Zell Miller (Georgia), Paul Patton (Kentucky), James Hunt (North Carolina), Thomas Ridge (Pennsylvania), David Beasley (South Carolina), and Cecil Underwood (West Virginia). Alternates Edwin Gardner (Alabama), Alexander Treadwell (New York), Ronald Kreitner (Maryland), and Dan Neff (Ohio) represented their states' governors.
**The View From ARC Leadership . . .****Jesse L. White Jr., Federal Co-Chairman**
President Clinton's budget for ARC, released on February 5, is truly historic. For the first time in the thirty-two year history of our agency, the president is recommending a special allocation from the Highway Trust Fund to accelerate the completion of the Appalachian Development Highway System. Until this year, our highways had to be built out of regular, appropriated funds.

For FY 1998, the president is recommending $200 million from the trust fund for our system. 

In addition, his budget has $90 million in our "regular" appropriations account for highways, for a grand total of $290 million. The special allocation in the trust fund will rise yearly throughout the authorization period of ISTEA, to a level of $500 million in 2003.

This new and bold commitment to completing the ADHS arises from the fact that, while theinterstate system is 99% finished, the Appalachian Development Highway System is only 77% complete. And, at therecent levels of regular appropriations, the final miles would be built only at the end of the 21stcentury.

Obviously, something has to be done to keep faith with the commitment the nation made to the people of Appalachia over thirty years ago. 

 By making our system eligible for special funding out of the trust fund, the promise and dream of an Appalachia fully connected to the American economy can be finally realized in the foreseeable future.

While there will be many complexities and controversies in the reauthorization of ISTEA during the 105th Congress, this issue will be paramount to the Appalachian states. It is hoped that either under the administration proposal or Senator Byrd's more ambitious plan, all our states would be net winners.

The other good news in the president's budget is that the mark for our regular appropriations is $165 million for FY 1998, $5 million more than our appropriated figure for the current year.

This will add some $14 million to our area development work, which will be crucial in continuing progress on our distressed counties program, the new strategic plan, and our regional initiatives.

Our "intensive care" approach to distressed counties is working. Over the past four years, the number of economically distressed counties in the Region has fallen from 115 to 94.

The requested increase in area development funds will accelerate the process of removing theremaining counties from distress and raising the entire Region to economic self-sufficiency.

The president's budget will also enable us to expand our entrepreneurship initiative from thecurrent planning and research stage to full regionwide implementation—a key strategy for fostering dynamic local economies.

The total ARC budget for FY 1998 is $365 million, one of the highest levels ever for the Commission. I am honored to represent a president with this type of commitment to ARC.

As always, we will be calling upon all our state partners and our bipartisan congressional leadership, as well as upon our local development districts, to help support and defend this budget. With a lot of hard work—and, as always, some good luck—this will be a truly banner year for the Appalachian Regional Commission.
**New Policies Improve J-1 Waiver Program**
Two major changes will improve the effectiveness of the Commission's J-1 Visa Waiver program.

Through ARC's J-1 program, foreign physicians with advanced training in American medical schools are placed for a minimum of three years in federally designated Health Professional Shortage Areas (HPSAs) in the Region.

First, the recently enacted FY 1997 omnibus appropriation legislation contains a provision which strengthens the government's enforcement power over violations of the J-1 policies of all federal agencies, including ARC.

Doctors who fail to fulfill their three-year service commitment to practice primary health care in areas with physician shortages will be forced to return to their home countries for at least two years before they can apply for any other U.S. immigration status.

Second, ARC has recently amended its J-1 policy to clarify and strengthen the requirements that health facilities which sponsor J-1 physicians must serve the medically indigent and accept Medicare and Medicaid assignments.

Based on language currently used by the National Health Service Corps, the new ARC regulations prohibit discrimination against the medically indigent and require the use of sliding fee scales for poverty-level and low-income individuals, as well as the conspicuous posting of a notice to patients at the practice site concerning these fee arrangements.

The new ARC policy stems in part from the growing number of placements of physicians in HPSAs that serve a specific population. It also responds to a recent report by the General Accounting Office that recommended actions to ensure that J-1 physicians actually serve the poverty populations they are supposed to serve.
**President Proposes Budget Increase for ARC Programs**
President Clinton has requested $165 million for the Appalachian Regional Commission for FY 1998, an increase of $5 million over the 1997 funding level. In addition, the president proposes spending $200 million from the federal Highway Trust Fund to accelerate completion of the Appalachian Development Highway System. 

"This administration is committed to keeping the nation's promise to Appalachia," said ARC Federal Co-Chairman Jesse L. White Jr. "Our emphasis is on the most economically distressed counties and on completion of this vitally important development highway system."

Under the president's budget, the Commission would receive $71 million for area development programs, an increase of $14 million from the amount appropriated by Congress in FY 1997.

Although final decisions on how the funds would be used would be made by the Commission, the administration proposes additional efforts to assist the Region's distressed counties and an expanded emphasis on the regional initiative in entrepreneurship, while continuing the work in the five goal areas outlined in the agency's strategic plan.

The budget provides $4.4 million for the Region's 69 local development districts. The Commission's operational costs would be budgeted at 3.4 percent.

Funding for the Commission's regular highway program is budgeted at $90 million. For the first time in the history of the Commission, the administration is also requesting an allocation of $200 million from the Highway Trust Fund toward completion of the 3,025-mile highway system.

These funds would be under the administrative and programmatic jurisdiction of ARC. The administration plans to include this in its draft of legislation reauthorizing federal highway programs.

The House Energy and Water Development Appropriations Subcommittee, chaired by Representative Joe McDade (R-PA), will hold hearings on ARC's budget on March 6. Federal Co-Chairman White and this year's states' co-chairman, Mississippi Governor Kirk Fordice, will testify on ARC's behalf.
**Clinton Budget Funds Development Activities**
President Clinton's budget for FY 1998 proposes $268 billion in discretionary domestic spending, an increase of $5.5 billion from 1997. This includes funding for a variety of federal economic development programs. 

**EC/EZ Program**Building on the experience of the first round of enterprise communities and empowermentzones (EC/EZ), the administration is proposing a second round of selections, with 100 newdesignations. Communities would receive a combination of tax incentives, direct grants, andpriority consideration for funds from federal economic development programs.

Like the first competition, this round would challenge communities to develop their owncomprehensive, strategic plans for revitalization, with input from residents and a wide array ofcommunity partners. The administration would invest in communities that develop the mostinnovative plans and secure significant local commitments.

**CDFI**The Treasury Department's Community Development Financial Institutions Fund, for which the budget proposes $125 million ($75 million more than in 1997), provides grants, loans, equity investments, and technical assistance to qualified CDFIs—including community developmentbanks, low-income credit unions, microenterprise funds, and many multibank community development corporations.

Federal funds may be used for small businesses, low-income housing, community facilities, andother community development activities.

**EDA**The president's budget request contains $344 million for the Economic Development Administration, roughly the same level as the agency received in 1997. Funding for EDA's planning program remains at the current level of $24 million.

Public works grants for infrastructure that fosters business growth and job creation would be funded at $160 million.

**RCAP**In keeping with the 1996 Farm Bill, the administration would consolidate a dozen of theDepartment of Agriculture's rural development programs under the Rural Community Advancement Program, budgeted at $688.57 million.
**Commission Announces Changes in Personnel**
A long-time professional staff member recently retired from the Commission.

Neil Walp, who went to work at the Commission when it was created in 1965, provided 31 years of service as a program developer and regional planner and, most recently, as a program analyst and senior agriculture and forestry advisor.

The Commission welcomes a new employee, LAN administrator Matthew Bender. He will be responsible for information systems development and the maintenance of ARC's computer systems.

In other actions, the Commission staff has honored two of its members with the annual peer awards for outstanding service to the Commission. Judy Maher, policy analyst in the Regional Planning and Research Division, and Deann Greathouse, program assistant in the General Counsel's Office, received cash awards.

All Commission staff nominate fellow workers for peer awards.
**ARC Notes**- ARC Federal Co-Chairman Jesse L. White Jr. recently joined Assistant Secretary of Commercefor Economic Development Phillip A. Singerman, Senator Max Baucus (D-MT), and Rep. JimOberstar (D-MN) in a forum on economic development sponsored by the National Association ofCounties. White stressed the importance of ARC's partnership with EDA in promoting theeconomic growth of the Region. The Commission will host the first formal gathering of advisors and editors of the 
Encyclopediaof Appalachia
, a multidisciplinary reference work covering the culture, geography, natural resources, and history of the 13-state mountain region, in Washington on Tuesday, March 4.
ARC has joined the Capital Area Rural Health Roundtable, which provides a forum forrepresentatives of national organizations, foundations, congressional offices, and federal agenciesto learn about and discuss health care issues.
Executive Director Tom Hunter recently presented staff service awards. Vernon Smith received a 30-year award, while Anne Bethea, Bob Decker, and Jan Jackson received 25-year awards. A 20-year plaque went to Henry King, while Evangeline Wells and Mike Wenger received 15-year awards. 
The Appalachia Leadership Initiative on Cancer will host a summit on cancer July 10–13 in Washington, D.C. For additional information, contact Lisa Hiner at 606/257-4033.
Senator Robert C. Byrd (D-WV) has introduced legislation, S. 182, that would authorize funding to complete the Appalachian Development Highway System over the next six years. 
**LDDs Plan Annual March Conference**
Local development districts from across the Region will participate in their annual conferenceMarch 16–18 at the Crystal City Marriott in Arlington, Virginia.

Sponsored by the Development District Association of Appalachia (DDAA) in conjunction with the Appalachian Regional Commission, this annual conference provides LDD members an opportunity to conduct their annual board and business meetings, attend workshops covering regional development issues, share with their peers innovative programs and services, and meet with congressional officials.

During Sunday's opening session, the association will honor Representatives Joseph McDade (R-PA) and Rick Boucher (D-VA) with a special congressional award, given each year to members of Congress who have strongly supported the Appalachian Regional Commission and the work of the 69 local development districts in providing a foundation for local economic growth in Appalachia.

Monday's session will provide participants an opportunity to attend workshops related to goals three and four of ARC's strategic plan. Workshop topics include: "Building Local Capacity—Seven Key Elements for an Effective Regional Council;" "Building Self-Sustaining Economies through More Effective Partnerships;" and "How to Partner with the Nonprofit Community."

The afternoon session will include a presentation on public speaking by Beverly Silverberg of Communications, Inc., as well as a workshop on the importance of LDD state associations.

The association will conclude the conference with a presentation related to goal five, "Quality Health Care—An Economic Development Tool," by Bruce Behringer, executive director of the Office of Rural and Community Health at East Tennessee State University.

For additional information, contact Robert Sokolowski, LDD program director, at 202/884-7707.

**Commission Project Promotes Regionalism**
Promoting "regionalism" as a key to local economic growth, ARC has recently funded the Northeast Alabama Development Forum, which will encourage cooperative development and planning activities in 11 Alabama and six Georgia counties.

Crossing state geographical and political boundaries, the Northeast Alabama Development Forum will establish a series of task forces to address regional development issues, conduct seminars and workshops on topics of regional interest, and host a two-day conference to explore themes of regional growth and cooperation.

"We want to take the time and make the opportunity to create a vision of what kind of south we want this to be," said H. Brandt Ayers, who will chair the forum. "In a busy world, somebody needs to step back and ask what it is we want to have happen," added Ayers, editor of the Alabama *Anniston Star*.

The project is based on the recognition that northeast Alabama and northwest Georgia share many concerns, including the availability of adequate water supplies, regional transportation needs, the region's workforce training needs, and the future of Fort McClellan.
The Northeast Alabama Development Forum will include the Alabama counties of Blount, Calhoun, Cherokee, Cleburne, De Kalb, Etowah, Marshall, Talladega, and St. Clair, and the Georgia counties of Floyd, Carroll, Chattanooga, Polk, Harralson, and Heard. 
**Strategy Statements Outline State Priorities for ARC Funds**
Implementing key elements of the Commission's new strategic plan, the Appalachian states have developed strategy statements for FY 1997, linking state programs and projects to ARC's five goals.

The strategy statements reflect the diverse approaches states are adopting in advancing ARC's ambitious goals.

**GOAL 1 - Education and Training**The role of education in fostering economic growth is evident in the plans states have for upgrading education in the Region. Seven states will support the use of improved curricula through telecommunications, while eight states will expand or implement programs that emphasize workforce preparation.

A partnership with the Appalachian Rural Systemic Initiative, a National Science Foundation initiative based in Kentucky, will work to improve the math and science scores of students in 66 distressed counties in Kentucky, North Carolina, Ohio, Tennessee, Virginia, and West Virginia.

**GOAL 2 - Infrastructure**Infrastructure, particularly water and sewer systems, is a high priority for all the Appalachian states, and 1997 investment totals for nonhighway infrastructure are likely to exceed the $41 million in ARC funds spent in 1996.

Eleven states have identified water systems, waste treatment plants, and sewerage services as priority projects this year, with most states having multiple projects in each category.

Kentucky and Virginia have commissioned special initiatives addressing the lack of potable water in areas of their states, and ARC funds will likely be used to support those efforts.

West Virginia issued $117 million in bonds in 1996 for water and sewer projects, and ARC dollars can be used to supplement these funds.

**GOAL 3 - Civic Capacity**This year the Appalachian states will address both leadership skills development and citizen mobilization through a variety of approaches. Eight states will concentrate on starting or enhancing local programs to provide leadership training. Nine states will focus on increasing the capacity of local governments and nonprofits by improving planning processes or encouraging collaborative service delivery.

Good models abound across the Region. Mississippi has established a Competitive Community Program, which provides local leadership with the tools to plan for lasting growth.

In New York, the Southern Tier West Regional Planning and Development Board uses outcome-based planning methods to get people started on community development initiatives.

**GOAL 4 - Dynamic Economic Base**Strategy statements indicate state support for a broad array of activities to foster more dynamic local economies, including enterprise development programs, recapitalization of revolving loan funds, and entrepreneurial education. Five states will support feasibility studies and marketing of tourism initiatives that can promote job creation and community renewal.

Tennessee will support opportunities for industry-cluster initiatives that build on the Region�s comparative advantages and that deepen the linkages among cluster-based sectors.

**GOAL 5 - Healthy People**By using telecommunications to expand access to health care, strengthening prenatal and neonatal programs in counties with high infant mortality rates, and identifying gaps in the delivery of health care services, states will work to improve health care in the Region.

Through public awareness, education, and outreach activities, the South Carolina Infant Mortality Reduction Project is nearing its goal of reaching a 90 percent immunization rate in the Appalachian part of the state.
**ARC Achievements for FY 1996****GOAL 1:  Education and Training**- Provided educational activities for 37,651 participants. Provided job skills training for 10,350 participants.**GOAL 2:  Infrastructure**- Opened 26 miles of Appalachian Development Highways. Provided water/sewer service for 15,932 households.Supported the construction of 190 low-/moderate-income houses.
GOAL 3:  Civic Capacity
Provided leadership programs for 7,464 participants.
GOAL 4:  Dynamic Economic Base
Assisted in the development of 15,686 jobs.
- Assisted in the retention of 17,659 jobs. Attracted $1.017 billion in matching private funds. **GOAL 5:  Healthy People**- Placed 146 doctors in medically underserved areas of the Region. Provided health services to 11,388 participants.**Commission Launches Community Capacity Project**
Not far from NASA's Space Flight Center in Huntsville, Alabama, ARC's federal, state, and local partners, along with the Rensselaerville Institute, are launching a multistage civic development program, created to help rural Appalachian communities explore, discover, and benefit from a larger universe of economic and community development strategies and problem-solving models.

The Appalachian Community Learning Project (ACLP) is providing a vehicle to showcase a broad range of successful problem-solving strategies and techniques pioneered by Appalachian communities and an opportunity for local Appalachian leaders to put these techniques to work in theircommunities.

The inaugural ACLP forum—taking place February 27–March 1 in Huntsville—will involve teams of local leaders from seven communities representing Appalachian Alabama, Georgia, Mississippi, and Tennessee.

"This is a 'homegrown' approach to community problem solving," said ARC Federal Co-Chairman Jesse L. White Jr.

"A number of our communities have made great strides in becoming economically self-reliant, in mobilizing their citizens, in organizing, in conceiving innovative ideas and strategies, in planning, and in successfully carrying out their vision. We view these examples—all homegrown in Appalachia—as great, untapped resources," said White, adding, "Communities learn best from other communities."

In late March, a second forum for the central Appalachian states will be held near Asheville, North Carolina. The third forum for northern Appalachia is scheduled for early May in Hidden Valley, Pennsylvania.

In all, over 150 community leaders from 32 communities will attend one of three forums, with over half representing ARC-designated distressed counties or communities within those counties.

The forums will provide participants an opportunity to identify local problems and map out first steps toward solving these concerns.

Backed with ARC technical and financial assistance, each ACLP community team will return home and take on a small project to solve an identified issue. Development officials from LDD and state ARC offices, as well as Commission staff, will provide technical support for these local efforts.

Follow-up activities will include a meeting of ACLP participants to celebrate successes and share experiences. Challenge grants will also be available to help successful communities.

This regionwide project is part of the Commission's regional initiative in leadership and civic development.
**ARC Moves Forward on Entrepreneurship**
As part of its planning efforts for a regional initiative in entrepreneurship, Commission staff recently met with business development and finance policy makers and practitioners from Kentucky and Pennsylvania.

The meetings are designed, in part, to determine the strengths and weaknesses of the Region's business development infrastructure and to determine the most appropriate role of ARC in stimulating locally-owned, job-creating businesses.

Commission staff will be visiting officials from North Carolina and Mississippi in March.

ARC's inquiry includes consultation with local and state economic development practitioners, nonprofit community development experts, and academic researchers.

The Commission is also looking at other federal and state programs created to address business capital gaps that often plague low-income areas, including the Community Development Financial Institution (CDFI) fund, the USDA's Alternative Agricultural Research and Commercialization Corporation, and several state-level venture capital funds.

In addition, Kentucky Highlands Investment Corporation and the Enterprise Corporation of the Delta are just two of the nonprofit organizations the Commission is looking at as successful models in stimulating business development in distressed rural areas.

The results of these discussions will be presented to the Policy Development Committee in April and will form the basis for deciding how best to implement the entrepreneurship initiative.
**Appalachian Schools to Gain Internet Access**
Joining forces with Projectneat, a California-based nonprofit organization, the Appalachian Regional Commission will help link 1,250 Appalachian schools to the Internet in 1997.

Projectneat will provide Appalachian schools with state-of-the-art Internet "appliances," which employ a simple push-button access system to display information on a large television screen instead of on a computer monitor.

These mobile devices can serve an entire school; and since information is displayed on a 27-inch television screen, it can be shared by an entire class.

In partnership with Projectneat, ARC will fund teacher training programs, assisting them with integrating these devices into their curricula.

Projectneat plans to donate interactive learning tools to connect every U.S. primary and secondary school to the Internet by the summer of 1998, focusing on underserved schools first.

In its work to support the economic development of the Region, ARC has funded nearly $600 million in education projects in its 13 member states since 1965.

This project was jointly announced by Federal Co-Chairman Jesse L. White Jr. and Kamran Elahian, founder of Projectneat, at the February 2 Governors' Quorum Meeting.
**DDAA to Sponsor Technology Workshop**
The Development District Association of Appalachia will sponsor a technology workshop May 18–20 at the Meadowview Marriott Conference Center in Kingsport, Tennessee.

Through a variety of workshop sessions, participants will have an opportunity to explore therelationship between information technology and effective government management, as well as the many uses of technology in economic and human resource development.

The workshop will also showcase technology applications in such areas as Geographic Information Systems (GIS), comprehensive and strategic planning, industrial sites marketing, andeffective use of electronic census data.

The registration fee is $95.00, and the registration deadline is May 2. For more information, contact LDD Program Director Bob Sokolowski at 202/884-7707.
**Upcoming Activities**March 6  Hearing on FY 1998 ARC Appropriation, Energy and Water Subcommittee, Washington, D.C.
March 7  Export Trade Advisory Council, Washington, D.C.
March 16–18  ARC/LDD Conference, Arlington, VA 
March 20–22  Appalachian Community Learning Project—Central Appalachia, Lake Junaluska Assembly, Lake Junaluska, NC
April 13–15  NADO Washington Policy Conference, Washington, D.C.
May 1–3  Appalachian Community Learning Project—Northern Appalachia Hidden Valley Conference Center, Hidden Valley, PAPublished bimonthly by the Appalachian Regional Commission, 1666 Connecticut Avenue, NW, Washington, DC 20235. Editor—Tanya Shimmons. For more information, call (202) 884-7700, fax (202) 884-7691, or send email to[email protected].
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