mission. Both practical politicians and knowledgeable theorists stated that the only hope for such allocation would be by Congressional action. The Congress disagreed and left it to the Commission—which meant primarily the Governors to reach such decisions based on their own intimate knowledge of differing problems and differing solutions. We can report to you that an allocation of funds, in every section where it was determined necessary, has been made. I can further offer to you the greatest tribute to the Commission and to the Governors-that each decision on these allocations was made by unanimous vote. The tables that follow show the allocation formulas, state percentages and dollar amounts for the appropriate section of the Act. STATE-BY-STATE ALLOCATIONS OF APPROPRIATED FUNDS, FISCAL YEARS 1966-67 Virginia exchanged $600,000 of its 214 money for same amount of 211 money from Alabama. 2 Georgia received $131,378 of 214 money as a transfer from North Carolina with agreement to repay from subsequent allocation. 3 Tennessee received $15,000 of 302 funds from Georgia for joint project. • Kentucky exchanged $190,833 of its 212 money for same amount of 211 money from Pennsylvania. Kentucky exchanged $361,167 of its 214 money for same amount of 211 money from Tennessee. 6 Tennessee exchanged $190,833 of 211 funds for the same amount of 212 funds from Kentucky. 7 Maryland received $56,000 of 214 money as a transfer from North Carolina with agreement to repay from subsequent allocation. New York received $750,000 of 214 money as a transfer from North Carolina with agreement to repay from subsequent allocation. Virginia received $50,000 of 211 funds as a transfer from North Carolina with agreement to repay from subsequent allocations. 10 Virginia exchanged $800,000 of its 214 money for same amount of 211 money from West Virginia. Note: Sec. 203, 10 percent equally; 45 percent for number of low-income farms; and 45 percent for cost of needed conservation practices on non-Federal agricultural lands. Sec. 211: 10 percent equally; 10 percent for land area; 20 percent for population; 30 percent for per capita income; and 30 percent for proportion of 14- to 17-year-olds not enrolled in school. Sec. 212: 10 percent equally; 10 percent for land area; 20 percent for population; 30 percent for per capita income; and 30 percent for proportion urban population. Sec. 214: 14 percent equally; 14 percent for land area; 28 percent for population; and 44 percent for per capita income. Sec. 302: 33 percent equally; 33% percent for land area; and 33% percent for population. Perhaps the most stirring example of this interstate cooperation is represented in the decisions that were made to implement the Kennedy-Javits amendment which allowed the Commission to bring New York into the Appalachian program on what the Congress described as "an appropriate basis." At its first Commission meeting the Commission voted to open discussion with the Governor of New York and his representatives to determine New York's eligibility and to ascertain New York's desire to participate. When that eligibility and desire were clearly evidenced, the State Membership, then comprised of nine Democratic and two Republican Governors, voted full partnership to New York in all areas except the development highway system and directed its consultant to conduct a detailed study to determine New York's development highway needs. That act alone was probably unprecedented since it meant that the states of Appalachia had to subtract funds from the amount each had already been allotted in order to permit full participation for New York. Following the report of its highway consultant which determined New York's development highway needs, the states of Appalachia took another unprecedented step in reallocating development highway funds in the amount of $25 million to permit New York to catch up in the planning, design and early construction of its development corridors. The states of Appalachia did this with the full realization that they were dependent upon Congressional action for any reimbursement of this $25 million. The full authorization needed to permit New York to construct a development highway system is before you in the Committee bill and the Commission's support and reasons for this support are clearly outlined in the discussion of Section 201 below. The third innovation is the manner the Commission has chosen to implement the Congressional directive that funds in this program be expended in areas with a significant potential for future growth and where the greatest return on public dollars can be expected. With the possible exception of time devoted to outlining a sound development highway system, no problem has taken more of the Commission's time than the manner in which that directive was to be carried out. It was evident to us from the beginning that there could be no such thing as a "regional" investment plan. There is too much of a diversity of problems and need within the 12 state area of Appalachia. For that reason it was decided at the outset that each state should develop its own investment plan. That plan was to include those areas in which the state thought future growth was most likely; it was to include an analysis of what specific investment could best enhance the possibility for such growth; and it was to establish priorities for projects to implement that growth potential. Those plans have been filed with the Appalachian Commission and they are the guide for investment in each state. There is diversity among these plans. Each state recognizes the plans are not as sophisticated as they will be in July 1971-when this Commission has completed its business and has gone out of existence. There will be significant inputs from research that has been carried on by the Appalachian Commission and by the states themselves and there will be other inputs resulting from research done by other units of Government, by the academic institutions in the region, as well as outside, and by the significant efforts made by private industry. But despite their relative insufficiency, these plans clearly evidence the intention of each of the Appalachian states to fulfill its obligation to the Congress. The state investment plans represent some remarkably courageous decisions on the part of the Governors because they outline which areas will be, in effect, eligible for assistance under the Appalachian program. This has resulted in some rather vocal protests from sections of the region which, by omission in these plans, are ineligible for assistance. I think the word courageous is the correct one to apply to the gubernatorial decisions. These Governors have dealt with the hard fact that the Appalachian program, like any other Federal grant-in-aid program, cannot possibly provide all the funds that are requested by all of the communities seeking assistance. They have attempted to apply their judgment as to where these funds will produce the most benefits for the most people; in doing so they have been willing to subject themselves to the protests that have inevitably resulted. The fourth area of departure has been the increased coordination of public effort that has resulted from the Appalachian program. This increased coordina tion has taken place at all levels of Government. Here in Washington a variety of cooperative systems have been evolving between the Appalachian Commission and the major Federal agencies with substantial financial commitments to the region. At the state level each Governor has designated a man to supervise the Appalachian program within his state and has provided him with access to those state agencies which must necessarily be involved in any coordinated investment program. Councils of state agencies have been formed to discuss distribution of Appalachian dollars. Those discussions have been a key to the Governor's final decision on where to allot his funds to produce the greatest return. In turn, these offices have become the vehicle for coordinated expenditures within specific local areas-in accordance with state investment plans which outline major local problems and suggest the public expenditure necessary to solve those problems. The fifth, and final, measure of difference between the Appalachian program and other similar programs in the past has been the spirit of cooperation which has developed between the Federal and state partners on this Commission. One of the criticisms of the proposed Commission structure that was constantly leveled during Congressional debate during 1965 was the so-called Federal veto possessed by the Federal Cochairman. That so-called veto has never been exercised and it is my own personal judgment that it need never be. There have been a number of times when that veto might have been used. But the communication and dialogue which the Commission structure permits resulted in a state modification of proposals and projects which obviated Federal concern. Conversely that same Commission pattern of communication and dialogue resulted in a clear understanding on the Federal side of the exact nature of a state problem. Such clarity generally meant that Federal support could be given without any modification of the project or proposal. I would submit that this kind of give and take is far more possible in a framework such as that of the Appalachian Regional Commission than it is in a relationship between line agencies at the Federal and state level. In most instances, Federal agencies must operate within rather rigid legislative mandates which restrict their flexibility on program and project decisions. Even more restraining are the rules and regulations which arise during many years of Federal administration of most grant-in-aid programs. In most instances, the sometimes artificial restraints are not the result of bureaucratic pettiness. They are really the result of a search for some national norm that would do the best job of satisfying the most and antagonizing the least. Unfortunately, such a national norm rarely can meet the precise problems that exist in a given area of the country. Most Federal officials are powerless to take into account peculiar local or state problems. They must adhere to their legislation or the regulations they have imposed upon themselves to implement that legislation. The Appalachian program permits a far more flexible decision-making process; both the policy and procedures of the Commission are designed to honor the particular conditions found in each state. The best proof of this I think can be found in the history of the Commission's activities. During the course of our 24 months of activity we have passed 122 resolutions which establish Commission policy and we have approved 516 grants for construction, demonstration or research. The Commission's vote on almost all of these actions was unanimous. Mr. SWEENEY. In this area of interstate cooperation, I can think of no better example of the kind of selflessness that has characterized the State performance and in the processes by which the State of New York was admitted to full partnership in the Appalachia effort. You will recall that the bill in 1965 permitted the Commission, in agreement with the Governor of the State of New York, to invite New York in to participate on whatever basis the Commission deemed appropriate. Long after the Commission had already agreed to allocate dollars, it was decided that certain counties in New York, the 13 in the southern tier, did share Appalachian characteristics, both as to terrain and the status of the economy; and as a consequence the Commission invited the Governor of New York to bring those 13 counties into the program and the Governor accepted. It was at that stage that the Appalachian Commission proceeded to redivide the funds that had already been allocated to it, to insure a full New York participation in the program. This included both the highway area and all the other programs for which the Commission has funds to complement or supplement within the Appalachian region. I think the third major departure this program represents, and one which I consider to be particularly significant, is the manner in which the Commission has proceeded to enforce the congressional directive with the dollars under this program being invested in areas of significant potential for growth. This implementation of that directive, I believe, has involved some of the hardest and toughest political decisions that any Governor has been called upon to make. Because in isolating those areas in each of these States where there was a recognized potential for growth, the Governors had to, in effect, acknowledge that there were other areas in the States which did not have such potential, and, therefore, would be ineligible for certain forms of assistance under this program. I think we were told in a number of the cases in 1965 that that broad directive was incapable of implementation, and yet I think that the performance of the Commission so far in implementing it—and I give 9812 percent of the credit to the States for this in the vigorous and uncompromising manner in which they moved to implement this section of the act. There are two other areas which are really complementary and which this Commission, I think, has made some broad departures from past traditional and public investment programs. The first one would be in the area of Federal, State, and local cooperation. Each State has been required to submit a plan in which it clearly states what kind of investments it chooses to make in order to promote economic development. This has involved an absolute necessity for coordination of local, State, and Federal investment, as well as a substantial consideration for what forms of private investment would follow. And I think an examination of the investments which the Commission has made, again largely because of the manner in which the States have pursued these objectives, is one of the most exemplary performances that it has been my privilege to witness in this time. And the fifth area where I think there has been great progress is in the partnership which has developed between the Federal and State governments. I am not just talking about the partnership between the Federal cochairman and the States and the Commission; I am talking about the kind of response that has been given to the States from the Federal agencies who are deeply involved in these programs, and right across the board-the Department of Commerce, the new Department of Transportation, the Department of Interior, the Department of Agriculture, HEW, all of them have responded to the kinds of requests the States have made. I think it is largely because they have seen within the State requests the kind of planning that they have always considered to be essential for economic development. I think when you hear from these State witnesses, from Mr. Giles, who is here today representing Governor Rhodes, and from Governor Smith himself, the present State cochairman, that this partnership that has developed is recognized on both sides. It is a two-way street and one which we think, if it continues, can be a significant pattern for future interstate Federal cooperation. I am going to conclude with that, Mr. Chairman, and ask Mr. Fleming, who has succeeded me, to go ahead and talk about what is coming up with the bill in the future. Mr. JONES. Thank you, sir. Mr. Fleming. Mr. FLEMING. Thank you, Mr. Chairman. I would like to follow the precedent of Mr. Sweeney, and ask that my prepared statement be inserted in the record. Mr. JONES. Without objection, your statement will be received and printed in the record at this point. (The prepared statement of Joe W. Fleming follows:) STATEMENT BY JOE W. FLEMING, FEDERAL COCHAIRMAN, APPALACHIAN REGIONAL COMMISSION, BEFORE THE HOUSE PUBLIC WORKS COMMITTEE, MAY 9, 1967 Mr. Chairman and members of the Subcommittee, it is a pleasure for me to appear before you to report on the accomplishments of the Appalachian Development Program in the first two years of its life and to describe the provisions of the pending legislation. A number of bills to extend the program have been introduced in the House. The Chairman of the House Public Works Committee, Mr. Fallon, introduced H.R. 4446, a companion bill to S. 602. S. 602 was introduced in the Senate by Senator Jennings Randolph, Chairman of the Senate Public Works Committee, and 33 cosponsors. Two weeks of hearings by the Subcommittee on Regional Economic Development were held beginning on January 24, 1967, and concluding February 3, 1967. The Subcommittee and the full Committee reported S. 602 with amendments on April 6, and the Senate passed the bill by vote of 68 to 13 on April 27, 1967. A number of amendments were added to the bill by the Committee. We are requesting and S. 602 provides new legislative authority for all sections of the Act other than the highway program and the authorization of the Commission itself. The authorization levels are approximately those carried in the 1965 Act. As members of the Subcommittee will recall, the 1965 Act contained a six-year authorization for highways while other programs were authorized only through FY 1967. We have prepared a detailed section-by-section report on the program as it has evolved to date. It would be useful, I think, to outline briefly the major changes provided for in the Senate bill. We are requesting an increase in the authorization for the highway program from the present $840 million to $1,015,000,000. This is to cover part of the cost of constructing a highway corridor in New York State from Erie to Binghampton and a highway in the State of Pennsylvania linking this corridor with the remainder of te system. These improvements were not contemplated at the time the Act was passed due to the fact that New York had not been included in the planning of the program. The Senate bill includes at our request a new section which would establish a revolving fund administered by the Department of Housing and Urban Development to stimulate the use of the program authorized by Section 221 of the National Housing Act. Through amendments added in the Senate Comimttee, the bill also authorizes additional funds for the Region through the National Foundation for the Arts and Humanities to support cultural programs in the Region, for hardwood research and for a study of mine acid drainage in the Region. The Senate bill also provides for the inclusion of 18 counties in Mississippi, two in Alabama and one in New York State. The Appalachian Governors and the Commission endorsed the inclusion of 26 counties in Mississippi based on a request from the Governor of that State and a study performed by the Commission staff. The two additional Alabama counties were also recommended because they are contiguous with the present Region and the counties recommended in Mis 81-844 0-67- -3 |