program authorized by this section. The Secretary shall have authority to approve in whole or in part such recommendations or to require modifications or revisions thereof: Provided, That in no event shall the Secretary approve any recommendations for any construction 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 appropriation authorizations in subsection (d). Assistance under this section shall be extended only pursuant to and in accordance with such recommendations of the Commission as are approved by the Secretary. All development highways so approved, if not already coincident with the Federal-aid primary system, shall be added to such system without regard to the mileage limitation set forth in title 23, United States Code, section 103(b).

(c) Federal assistance to any construction project under this section shall not exceed 50 per centum of the costs of such project, unless the Secretary determines, pursuant to the recommendation of the Commission, that assistance in excess of such percentage is required in furtherance of the purposes of this Act: Provided, That in no event shall such Federal assistance exceed 80 per centum of such costs.

(d) To carry out this section, there is hereby authorized to be appropriated (1) the sum of $460,000,000, and (2) the further sum of $185,000,000 to be used only to pay for Federal assistance in excess of 50 per centum of the costs of a construction project pursuant to the provisions of subsection (c), both sums to remain available until expended, when so specified in the appropriation Acts.

DEMONSTRATION HEALTH FACILITIES

SEC. 202. (a) In order to demonstrate the value of adequate health and medical facilities in the region, the Secretary of Health, Education, and Welfare is authorized to make grants for the construction, equipment, and operation of multicounty demonstration health facilities, including hospitals, regional health diagnostic and treatment centers, and other facilities necessary to health. Grants for such construction (including initial equipment) shall be made in accordance with the applicable provisions of title VI of the Public Health Service Act (42 U.S.C. 291-291z) and the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (77 Stat. 282), without regard to any provisions therein relating to appropriation authorization ceilings or to allotments among the States: Provided, That 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 such provisions relating thereto.

(b) Grants under this section for construction (including initial equipment) shall not exceed 80 per centum of the costs thereof, and shall not exceed $41,000,000 in the aggregate. Grants under this section for operation (including equipment other than initial equipment) of a project may be made up to 100 per centum of the costs thereof for the partial fiscal year and the first two full fiscal years following the commencement of such operations; for the next three full fiscal years, such grants shall not exceed 50 per centum of such costs. No grants for operation of a project shall be made after five full fiscal years following the commencement of such operations.

PASTURE IMPROVEMENT AND DEVELOPMENT

SEC. 203. (a) In order to promote fuller utilization of one of the region's important natural resources, the Secretary of Agriculture is authorized to make grants to assist in the improvement and development of pastureland for livestock in the region. Grants to any person under this section shall not exceed 80 per centum of the costs of improving and developing twenty-five acres of pastureland utilized by such person.

(b) In carrying out the provisions of this section, the Secretary of Agriculture shall utilize the services of the State and local committees provided for in section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h (b)), and is authorized to utilize the facilities, services, and authorities of the Commodity Credit Corporation: Provided, That such Corporation shall not make any expenditures to carry out the provisions of this subsection unless funds specifically appropriated for such purpose have been transferred to it.

TIMBER DEVELOPMENT ORGANIZATIONS

SEC. 204. In order that the region shall more fully benefit from the timber stands that are one of its prime assets, the Secretary of Agriculture is authorized to

(a) provide technical assistance in the organization and operation, under State law, of timber development organizations having as their objective the carrying out of timber development programs to achieve improved timber productivity, better quality timber, and an increased return for landowners through (1) continuity of management, cutting practices, and marketing, (2) the administrative or physical consolidation of small holding into efficient management units, and (3) other appropriate means; and

(b) provide not more than one-half of the initial capital requirements of such organizations through loans under the applicable provisions of the Consolidated Farmers Home Administration Act of 1961 (7 U.S.C. 1926 et seq.).

PART B.-SUPPLEMENTATIONS AND MODIFICATIONS OF EXISTING PROGRAMS

VOCATIONAL EDUCATION FACILITIES

SEC. 211. In order to provide basic facilities to give the people of the region the training and education they need to obtain employment, the Secretary of Health, Education, and Welfare is authorized to make grants for construction of the school facilities needed for the provision of vocational education in areas of the region in which such education is not now adequately available. Such grants shall be made in accordance with the provisions of the Vocational Education Act of 1963 (77 Stat. 403), without regard to any provisions therein relating to appropriation authorization ceilings or to allotments among the States: Provided, That 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 such provisions relating thereto.

SEWAGE TREATMENT WORKS

SEC. 212. In order to provide facilities to assist in the prevention of pollution of the region's streams and to protect the health and welfare of its citizens, the Secretary of Health, Education, and Welfare is authorized to make grants for the construction of sewage treatment works in accordance with the provisions of the Federal Water Pollution Control Act (33 U.S.C. 466 et seq.) without regard to any provisions therein relating to appropriation authorization ceilings or to allotments among the States: Provided, That 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 such provisions relating thereto.

TECHNICAL ASSISTANCE TO TIMBER AND WOOD PRODUCTS INDUSTRY

SEC. 213. In order to assist in the application of principles of product diversification, strong capital structure, aggressive marketing, and trained labor and management to the timber and wood products industry, the Secretary of Agriculture is authorized to provide technical assistance to locally established organizations engaged in timber production and wood products manufacture and marketing, as part of his mandate under the organic Act of May 15, 1862 (5 U.S.C. 511).

FISH AND WILDLIFE RESTORATION

SEC. 214. In order to provide for demonstration of strip mine reclamation and other needed improvements to the lands of the region, the Secretary of the Interior is authorized to initiate and accelerate fish and wildlife restoration projects in the region in accordance with the provisions of the Act of September 2, 1937 (16 U.S.C. 669 et seq.) and the Act of August 9, 1950 (16 U.S.C. 777 et seq.), without regard to any provisions therein relating to apportionments among the States and to limitations on the availability period of funds: Provided, That the expenses of projects under this section shall be paid 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 apportionments among the States made pursuant to such provisions relating thereto.

AMENDMENTS OF HOUSING ACT OF 1954

SEC. 215. (a) Section 701(a) of the Housing Act of 1954 (40 U.S.C. 461(a)) is amended by striking the word "and" in paragraph (4), by substituting for the period at the end of paragraph (5) the phrase "; and", and by adding a new paragraph (6) to read as follows: "(6) The Appalachian Regional Commission established by title I of the Appalachian Regional Development Act of 1964, for comprehensive planning for the region, as defined by section 502 of that Act."

(b) Section 701 (b) of the Housing Act of 1954 (40 U.S.C. 461 (b)) is amended by adding before the phrase "for not more than 75 per centum of such estimated cost" the phrase "or the Appalachian Regional Commission,".

SUPPLEMENTS TO GRANT-IN-AID PROGRAMS

SEC. 216. In order to enable the people and communities of the region to take maximum advantage of designated Federal grant-in-aid programs (as hereinafter defined) for which they are eligible but for which, because of their economic situation, they cannot supply the required matching share, the Secretary of Commerce is authorized, pursuant to specific recommendations of the Commission approved by him and after consultation with the appropriate Federal officials, to allocate funds appropriated to carry out this Act to the heads of the departments, agencies, and instrumentalities of the Federal Government responsible for the administration of such grant-in-aid programs. Funds so allocated shall be used for the sole purpose of increasing the Federal contribution to projects under such programs above the fixed maximum portion of the cost of such project otherwise authorized by the applicable law: Provided, That the Federal portion of such costs shall not be increased in excess of the percentages established by regulations promulgated by the Secretary of Commerce: And provided further. That from and after the beginning of the third full fiscal year following the date of enactment of this Act, such regulations shall in no event authorize the Federal portion of such costs to exceed 80 per centum thereof. The term "designated Federal grant-in-aid programs," as used in this section, means such of the Federal grant-in-aid programs authorized by this Act and and such other existing or future Federal grant-in-aid programs assisting in the construction or operation of facilities, as the Secretary of Commerce may, in furtherance of the purposes of this Act and after consultation with the Commission, designate as eligible for allocation of funds under this section: Provided, That in no event shall the term include the program for the construction of development highways and access roads authorized by section 201 of this Act or any other program relating to highway or road construction.

PART C-GENERAL PROVISIONS

STATE AND LOCAL EXPENDITURES

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 public funds within and 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 such expenditures for its last two full fiscal years preceding the date of enactment of this Act.

CONSENT OF STATES

SEC. 222. Nothing contained in this Act shall be interpreted as requiring any State or political subdivision of a State to engage in or accept any program without its consent.

LIMITATION ON EXPENDITURE OF FUNDS

SEC. 223. Programs authorized under any section of this title, other than sections 201 and 216, shall be carried out under plans recommended by the Commission and approved by the President or such Federal official or officials as the President may designate.

TITLE III-ADMINISTRATION

RESEARCH AND DEMONSTRATION PROJECTS AND GRANTS FOR ADMINISTRATIVE EXPENSES SEC. 301. The Secretary of Commerce is authorized

(a) either directly or through arrangements with appropriate public or private organizations (including the Commission), to provide funds for investigation, research, studies, and demonstration projects which will further the purposes of this Act; and

(b) either directly or through arrangements with the Commission, to make grants for administrative expenses to local development districts. The amount of any such grant shall not exceed the difference between existing non-Federal funds provided for administrative expenses and the total funds needed for an expanded program and shall in no event exceed 75 per centum of such expenses in any one fiscal year. The non-Federal contributions may be in cash or in kind, fairly evaluated, including but not limited to space, equipment, and services. Only local development districts which meet the requirements of subsections (a) and (b) of section 403 shall be eligible for assistance under this section.

USE OF AVAILABLE FACILITIES

SEC. 302. To the fullest extent practicable in carrying out the provisions of this Act, the Federal officers and employees involved shall use the available services and facilities of other departments, agencies, and instrumentalities of the Federal Government, but only with their consent and, where appropriate, on a reimbursable basis. The foregoing requirement shall be implemented to avoid the duplication of existing staffs and facilities in any department, agency, or instrumentality of the Federal Government.

DELEGATION BY SECRETARY OF COMMERCE

SEC. 303. The Secretary of Commerce is authorized to delegate his functions under this Act, to the extent he deems appropriate, to the Administration of the Appalachian Development Corporation appointed pursuant to section 402. The authority hereby granted shall be in addition to, and not in limitation of, any authority now existing or otherwise granted by 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.

REVIEW BY INDEPENDENT COMMITTEE

SEC. 305. The programs authorized by this Act shall be reviewed by an independent committee appointed by the Secretary of Commerce. The Committee members shall be composed of both private citizens and Federal, State, and local officials, and shall be compensated by the Commission. The Committee shall examine the effectiveness of such programs and make recommendations with regard to their continuation and modification. Such examination shall begin at the start of the Commission's fifth fiscal year of operations, and such recommendations shall be made within ninety days thereafter.

TITLE IV-APPALACHIAN DEVELOPMENT CORPORATION

CREATION OF CORPORATION

SEC. 401. In order to provide financial assistance to local development districts in the region, there is hereby created as an agency of the United States, subject to the direction and supervision of the President or the head of such department or agency as he may designate, a body corporate to be known as the Appalachian Development Corporation (hereinafter referred to as the "Corporation"), which shall have succession until dissolved by the Act of Congress.

MANAGEMENT

SEC. 402. The management of the Corporation shall be vested in an Administrator, who shall be appointed by the President, by and with the advice and consent of the Senate. The Administrator shall receive compensation at the rate provided in section 106(a) of the Federal Executive Pay Act of 1956 (5 U.S.C. 2205 (a)).

LOCAL DEVELOPMENT DISTRICTS

SEC. 403. (a) As used in this title, the term "local development district" means (1) an incorporated body, organized and chartered under State law, (2) an agency or instrumentality of a State or local government, or (3) an agency or instrumentality created through an interstate compact, which body, agency, or instrumentality possesses the powers reasonably necessary to the performance of functions and the conduct of activities contemplated under this title and whose charter or authority shall include the economic development of counties, or parts of counties, or other political subdivisions within the region, or (4) an association or combination of such bodies, agencies, and instrumentalities.

(b) The charter or authority establishing a local development district shall state in general terms the objects for which the district is established, the name asumed by the district, the area or areas in which its operations are to be carried on, the place where its principal office is located, and, where applicable, the amount and classes of its shares of capital stock.

(c) Wherever appropriate, the operations and activities of a local development district may be undertaken in cooperation with other investors, lenders, financial institutions, and public agencies and instrumentalities, incorporated or unincorporated.

(d) Each charter or authority establishing a local development district, and amendments thereto, shall be forwarded to the Corporation prior to any application or financial assistance pursuant to section 404. The Corporation may prescribe such rules and regulations for the eligibility of local development districts for financial assistance as it deems necessary.

FINANCIAL ASSISTANCE

SEC. 404. (a) The Corporation is authorized to purchase the obligations of, or make loans to, local development districts upon such terms and conditions as the Corporation may deem appropriate. For purposes of this title, the purchase of such obligations and the making of loans shall be referred to as "financial assistance." Prior to extending financial assistance, the Corporation shall consider the views of the Commission and other appropriate agencies regarding the financial assistance sought. The Corporation shall make such examinations and require such reports of the organization, financial condition, operations, and activities of each local development district as it shall deem necessary and appropriate, and may impose charges for the cost of such examinations. (b) Approval of financial assistance to a local development district shall be subject to the following restrictions and limitations:

(1) The project for which financial assistance is sought will improve, on a continuing rather than 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:

(2) The project is consistent with plans approved by the Commission; (3) The financial assistance is not otherwise available on reasonable terms from private sources or from other Federal programs:

(4) There is reasonable assurance of the retirement or repayment of the financial assistance;

(5) The amount of the financial assistance, plus the amount of other funds available for such projects, are adequate to assure the completion thereof;

(6) The local development district agrees to purchase stock in the Corporation as determined under section 405; and

(7) The financial asssistance will not be used in relocating establishments from one area to another, or to finance the cost of industrial plants, commerical facilities, machinery, or working capital.

(e) No obligations shall be purchased and no loans shall be made which have maturity dates in excess of forty years, but the Corporation may authorize deferment of the initial principal repayments for not to exceed five years.