[105th Congress Public Law 393]
[From the U.S. Government Printing Office]


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[DOCID: f:publ393.105]


[[Page 3595]]

ECONOMIC DEVELOPMENT ADMINISTRATION AND APPALACHIAN REGIONAL DEVELOPMENT 
                           REFORM ACT OF 1998

[[Page 112 STAT. 3596]]

Public Law 105-393
105th Congress

                                 An Act


 
  To reauthorize and make reforms to programs authorized by the Public 
Works and Economic Development Act of 1965 and the Appalachian Regional 
     Development Act of 1965. <<NOTE: Nov. 13, 1998 -  [S. 2364]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Economic 
Development Administration and Appalachian Regional Development Reform 
Act of 1998. Urban and rural areas.>> 
Urban and 
rural 
areas.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. <<NOTE: 42 USC 3121 note.>> 

    (a) Short Title.--This Act may be cited as the ``Economic 
Development Administration and Appalachian Regional Development Reform 
Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                      TITLE I--ECONOMIC DEVELOPMENT

Sec. 101. Short title.
Sec. 102. Reauthorization of Public Works and Economic Development Act 
           of 1965.
Sec. 103. Conforming amendment.
Sec. 104. Transition provisions.
Sec. 105. Effective date.

               TITLE II--APPALACHIAN REGIONAL DEVELOPMENT

Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Meetings.
Sec. 204. Administrative expenses.
Sec. 205. Compensation of employees.
Sec. 206. Administrative powers of Commission.
Sec. 207. Cost sharing of demonstration health projects.
Sec. 208. Repeal of land stabilization, conservation, and erosion 
           control program.
Sec. 209. Repeal of timber development program.
Sec. 210. Repeal of mining area restoration program.
Sec. 211. Repeal of water resource survey.
Sec. 212. Cost sharing of housing projects.
Sec. 213. Repeal of airport safety improvements program.
Sec. 214. Cost sharing of vocational education and education 
           demonstration projects.
Sec. 215. Repeal of sewage treatment works program.
Sec. 216. Repeal of amendments to Housing Act of 1954.
Sec. 217. Supplements to Federal grant-in-aid programs.
Sec. 218. Program development criteria.
Sec. 219. Distressed and economically strong counties.
Sec. 220. Grants for administrative expenses and commission projects.
Sec. 221. Authorization of appropriations for general program.
Sec. 222. Extension of termination date.
Sec. 223. Technical amendment.

[[Page 112 STAT. 3597]]

  TITLE I-- <<NOTE: Economic Development Administration Reform Act of 
1998.>> ECONOMIC DEVELOPMENT

SEC. 101. SHORT TITLE. <<NOTE: 42 USC 3121 note.>> 

    This title may be cited as the ``Economic Development Administration 
Reform Act of 1998''.
SEC. 102. REAUTHORIZATION OF PUBLIC WORKS AND ECONOMIC DEVELOPMENT 
                        ACT OF 1965.

    (a) First Section Through Title VI--The Public Works and Economic 
Development Act of 1965 (42 U.S.C. 3121 et seq.) is amended by striking 
the first section and all that follows through the end of title VI and 
inserting the following:

``SECTION 1. SHORT TITLE; TABLE OF CONTENTS. <<NOTE: 42 USC 3121 
            note.>> 

    ``(a) Short Title.--This Act may be cited as the `Public Works and 
Economic Development Act of 1965'.
    ``(b) Table of Contents.--The table of contents of this Act is as 
follows:

``Sec. 1. Short title; table of contents.
``Sec. 2. Findings and declarations.
``Sec. 3. Definitions.

      ``TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS COOPERATION AND 
                              COORDINATION

``Sec. 101. Establishment of economic development partnerships.
``Sec. 102. Cooperation of Federal agencies.
``Sec. 103. Coordination.

      ``TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

``Sec. 201. Grants for public works and economic development.
``Sec. 202. Base closings and realignments.
``Sec. 203. Grants for planning and grants for administrative expenses.
``Sec. 204. Cost sharing.
``Sec. 205. Supplementary grants.
``Sec. 206. Regulations on relative needs and allocations.
``Sec. 207. Grants for training, research, and technical assistance.
``Sec. 208. Prevention of unfair competition.
``Sec. 209. Grants for economic adjustment.
``Sec. 210. Changed project circumstances.
``Sec. 211. Use of funds in projects constructed under projected cost.
``Sec. 212. Reports by recipients.
``Sec. 213. Prohibition on use of funds for attorney's and consultant's 
           fees.

 ``TITLE III--ELIGIBILITY; COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES

``Sec. 301. Eligibility of areas.
``Sec. 302. Comprehensive economic development strategies.

               ``TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

``Sec. 401. Designation of economic development districts.
``Sec. 402. Termination or modification of economic development 
                      districts.
``Sec. 403. Incentives.
``Sec. 404. Provision of comprehensive economic development strategies 
                      to Appalachian Regional Commission.
``Sec. 405. Assistance to parts of economic development districts not in 
                      eligible areas.

                        ``TITLE V--ADMINISTRATION

``Sec. 501. Assistant Secretary for Economic Development.
``Sec. 502. Economic development information clearinghouse.
``Sec. 503. Consultation with other persons and agencies.
``Sec. 504. Administration, operation, and maintenance.
``Sec. 505. Businesses desiring Federal contracts.
``Sec. 506. Performance evaluations of grant recipients.

[[Page 112 STAT. 3598]]

``Sec. 507. Notification of reorganization.

                        ``TITLE VI--MISCELLANEOUS

``Sec. 601. Powers of Secretary.
``Sec. 602. Maintenance of standards.
``Sec. 603. Annual report to Congress.
``Sec. 604. Delegation of functions and transfer of funds among Federal 
                      agencies.
``Sec. 605. Penalties.
``Sec. 606. Employment of expediters and administrative employees.
``Sec. 607. Maintenance and public inspection of list of approved 
                      applications for financial assistance.
``Sec. 608. Records and audits.
``Sec. 609. Relationship to assistance under other law.
``Sec. 610. Acceptance of certifications by applicants.

                          ``TITLE VII--FUNDING

``Sec. 701. General authorization of appropriations.
``Sec. 702. Authorization of appropriations for defense conversion 
           activities.
``Sec. 703. Authorization of appropriations for disaster economic 
           recovery activities.

``SEC. 2. FINDINGS AND DECLARATIONS. <<NOTE: 42 USC 3121.>> 

    ``(a) Findings.--Congress finds that--
            ``(1) while the economy of the United States is undergoing a 
        sustained period of economic growth resulting in low 
        unemployment and increasing incomes, there continue to be areas 
        suffering economic distress in the form of high unemployment, 
        low incomes, underemployment, and outmigration as well as areas 
        facing sudden economic dislocations due to industrial 
        restructuring and relocation, defense base closures and 
        procurement cutbacks, certain Federal actions (including 
        environmental requirements that result in the removal of 
        economic activities from a locality), and natural disasters;
            ``(2) as the economy of the United States continues to grow, 
        those distressed areas contain significant human and 
        infrastructure resources that are underused;
            ``(3) expanding international trade and the increasing pace 
        of technological innovation offer both a challenge and an 
        opportunity to the distressed communities of the United States;
            ``(4) while economic development is an inherently local 
        process, the Federal Government should work in partnership with 
        public and private local, regional, and State organizations to 
        ensure that existing resources are not wasted and all Americans 
        have an opportunity to participate in the economic growth of the 
        United States;
            ``(5) in order to avoid wasteful duplication of effort and 
        to limit the burden on distressed communities, Federal, State, 
        and local economic development activities should be better 
        planned and coordinated and Federal program requirements should 
        be simplified and made more consistent;
            ``(6) the goal of Federal economic development activities 
        should be to work in partnership with local, regional, and State 
        public and private organizations to support the development of 
        private sector businesses and jobs in distressed communities;
            ``(7) Federal economic development efforts will be more 
        effective if they are coordinated with, and build upon, the 
        trade and technology programs of the United States; and
            ``(8) under this Act, new employment opportunities should be 
        created by developing and expanding new and existing public 
        works and other facilities and resources rather than by merely 
        transferring jobs from one area of the United States to another.

[[Page 112 STAT. 3599]]

    ``(b) Declarations.--Congress declares that, in order to promote a 
strong and growing economy throughout the United States--
            ``(1) assistance under this Act should be made available to 
        both rural and urban distressed communities;
            ``(2) local communities should work in partnership with 
        neighboring communities, the States, and the Federal Government 
        to increase their capacity to develop and implement 
        comprehensive economic development strategies to address 
        existing, or deter impending, economic distress; and
            ``(3) whether suffering from long-term distress or a sudden 
        dislocation, distressed communities should be encouraged to take 
        advantage of the development opportunities afforded by 
        technological innovation and expanding and newly opened global 
        markets.

``SEC. 3. DEFINITIONS. <<NOTE: 42 USC 3122.>> 

    ``In this Act:
            ``(1) Comprehensive economic development strategy.--The term 
        `comprehensive economic development strategy' means a 
        comprehensive economic development strategy approved by the 
        Secretary under section 302.
            ``(2) Department.--The term `Department' means the 
        Department of Commerce.
            ``(3) Economic development district.--
                    ``(A) In general.--The term `economic development 
                district' means any area in the United States that--
                          ``(i) is composed of areas described in 
                      section 301(a) and, to the extent appropriate, 
                      neighboring counties or communities; and
                          ``(ii) has been designated by the Secretary as 
                      an economic development district under section 
                      401.
                    ``(B) Inclusion.--The term `economic development 
                district' includes any economic development district 
                designated by the Secretary under section 403 (as in 
                effect on the day before the effective date of the 
                Economic Development Administration Reform Act of 1998).
            ``(4) Eligible recipient.--
                    ``(A) In general.--The term `eligible recipient' 
                means--
                          ``(i) an area described in section 301(a);
                          ``(ii) an economic development district;
                          ``(iii) an Indian tribe;
                          ``(iv) a State;
                          ``(v) a city or other political subdivision of 
                      a State or a consortium of political subdivisions;
                          ``(vi) an institution of higher education or a 
                      consortium of institutions of higher education; or
                          ``(vii) a public or private nonprofit 
                      organization or association acting in cooperation 
                      with officials of a political subdivision of a 
                      State.
                    ``(B) Training, research, and technical assistance 
                grants.--In the case of grants under section 207, the 
                term `eligible recipient' also includes private 
                individuals and for-profit organizations.
            ``(5) Federal agency.--The term `Federal agency' means a 
        department, agency, or instrumentality of the United States.

[[Page 112 STAT. 3600]]

            ``(6) Grant.--The term `grant' includes a cooperative 
        agreement (within the meaning of chapter 63 of title 31, United 
        States Code).
            ``(7) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, pueblo, or other organized group or 
        community, including any Alaska Native village or Regional 
        Corporation (as defined in or established under the Alaska 
        Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is 
        recognized as eligible for the special programs and services 
        provided by the United States to Indians because of their status 
        as Indians.
            ``(8) Secretary.--The term `Secretary' means the Secretary 
        of Commerce.
            ``(9) State.--The term `State' means a State, the District 
        of Columbia, the Commonwealth of Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, the Commonwealth of the Northern 
        Mariana Islands, the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of Palau.
            ``(10) United states.--The term `United States' means all of 
        the States.

      ``TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS COOPERATION AND 
                              COORDINATION

``SEC. 101. ESTABLISHMENT <<NOTE: 42 USC 3131.>>  OF ECONOMIC 
                          DEVELOPMENT PARTNERSHIPS.

    ``(a) In General.--In providing assistance under this title, the 
Secretary shall cooperate with States and other entities to ensure that, 
consistent with national objectives, Federal programs are compatible 
with and further the objectives of State, regional, and local economic 
development plans and comprehensive economic development strategies.
    ``(b) Technical Assistance.--The Secretary may provide such 
technical assistance to States, political subdivisions of States, sub-
State regional organizations (including organizations that cross State 
boundaries), and multi-State regional organizations as the Secretary 
determines is appropriate to--
            ``(1) alleviate economic distress;
            ``(2) encourage and support public-private partnerships for 
        the formation and improvement of economic development strategies 
        that sustain and promote economic development across the United 
        States; and
            ``(3) promote investment in infrastructure and technological 
        capacity to keep pace with the changing global economy.

    ``(c) <<NOTE: Regulations.>> Intergovernmental Review.--The 
Secretary shall promulgate regulations to ensure that appropriate State 
and local government agencies have been given a reasonable opportunity 
to review and comment on proposed projects under this title that the 
Secretary determines may have a significant direct impact on the economy 
of the area.

    ``(d) Cooperation Agreements.--
            ``(1) In general.--The Secretary may enter into a 
        cooperation agreement with any 2 or more adjoining States, or an

[[Page 112 STAT. 3601]]

        organization of any 2 or more adjoining States, in support of 
        effective economic development.
            ``(2) Participation.--Each cooperation agreement shall 
        provide for suitable participation by other governmental and 
        nongovernmental entities that are representative of significant 
        interests in and perspectives on economic development in an 
        area.

``SEC. 102. COOPERATION OF FEDERAL AGENCIES. <<NOTE: 42 USC 3132.>> 

    ``In accordance with applicable laws and subject to the availability 
of appropriations, each Federal agency shall exercise its powers, duties 
and functions, and shall cooperate with the Secretary, in such manner as 
will assist the Secretary in carrying out this title.

``SEC. 103. COORDINATION. <<NOTE: 42 USC 3133.>> 

    ``The Secretary shall coordinate activities relating to the 
preparation and implementation of comprehensive economic development 
strategies under this Act with Federal agencies carrying out other 
Federal programs, States, economic development districts, and other 
appropriate planning and development organizations.

      ``TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

``SEC. 201. GRANTS <<NOTE: 42 USC 3141.>>  FOR PUBLIC WORKS AND 
                          ECONOMIC DEVELOPMENT.

    ``(a) In General.--On the application of an eligible recipient, the 
Secretary may make grants for--
            ``(1) acquisition or development of land and improvements 
        for use for a public works, public service, or development 
        facility; and
            ``(2) acquisition, design and engineering, construction, 
        rehabilitation, alteration, expansion, or improvement of such a 
        facility, including related machinery and equipment.

    ``(b) Criteria for Grant.--The Secretary may make a grant under this 
section only if the Secretary determines that--
            ``(1) the project for which the grant is applied for will, 
        directly or indirectly--
                    ``(A) improve the opportunities, in the area where 
                the project is or will be located, for the successful 
                establishment or expansion of industrial or commercial 
                plants or facilities;
                    ``(B) assist in the creation of additional long-term 
                employment opportunities in the area; or
                    ``(C) primarily benefit the long-term unemployed and 
                members of low-income families;
            ``(2) the project for which the grant is applied for will 
        fulfill a pressing need of the area, or a part of the area, in 
        which the project is or will be located; and
            ``(3) the area for which the project is to be carried out 
        has a comprehensive economic development strategy and the 
        project is consistent with the strategy.

    ``(c) Maximum Assistance for Each State.--Not more than 15 percent 
of the amounts made available to carry out this section may be expended 
in any 1 State.

[[Page 112 STAT. 3602]]

``SEC. 202. BASE CLOSINGS AND REALIGNMENTS. <<NOTE: 42 USC 3142.>> 

    ``Notwithstanding any other provision of law, the Secretary may 
provide to an eligible recipient any assistance available under this 
title for a project to be carried out on a military or Department of 
Energy installation that is closed or scheduled for closure or 
realignment without requiring that the eligible recipient have title to 
the property or a leasehold interest in the property for any specified 
term.
``SEC. 203. GRANTS <<NOTE: 42 USC 3143.>>  FOR PLANNING AND GRANTS 
                          FOR ADMINISTRATIVE EXPENSES.

    ``(a) In General.--On the application of an eligible recipient, the 
Secretary may make grants to pay the costs of economic development 
planning and the administrative expenses of organizations that carry out 
the planning.
    ``(b) Planning Process.--Planning assisted under this title shall be 
a continuous process involving public officials and private citizens 
in--
            ``(1) analyzing local economies;
            ``(2) defining economic development goals;
            ``(3) determining project opportunities; and
            ``(4) formulating and implementing an economic development 
        program that includes systematic efforts to reduce unemployment 
        and increase incomes.

    ``(c) Use of Planning Assistance.--Planning assistance under this 
title shall be used in conjunction with any other available Federal 
planning assistance to ensure adequate and effective planning and 
economical use of funds.
    ``(d) State Plans.--
            ``(1) Development.--Any State plan developed with assistance 
        under this section shall be developed cooperatively by the 
        State, political subdivisions of the State, and the economic 
        development districts located wholly or partially in the State.
            ``(2) Comprehensive economic development strategy.--As a 
        condition of receipt of assistance for a State plan under this 
        subsection, the State shall have or develop a comprehensive 
        economic development strategy.
            ``(3) Certification to the secretary.--On completion of a 
        State plan developed with assistance under this section, the 
        State shall--
                    ``(A) certify to the Secretary that, in the 
                development of the State plan, local and economic 
                development district plans were considered and, to the 
                maximum extent practicable, the State plan is consistent 
                with the local and economic development district plans; 
                and
                    ``(B) identify any inconsistencies between the State 
                plan and the local and economic development district 
                plans and provide a justification for each 
                inconsistency.
            ``(4) Comprehensive planning process.--Any overall State 
        economic development planning assisted under this section shall 
        be a part of a comprehensive planning process that shall 
        consider the provision of public works to--
                    ``(A) promote economic development and opportunity;
                    ``(B) foster effective transportation access;
                    ``(C) enhance and protect the environment; and
                    ``(D) balance resources through the sound management 
                of physical development.

[[Page 112 STAT. 3603]]

            ``(5) Report to secretary.--Each State that receives 
        assistance for the development of a plan under this subsection 
        shall submit to the Secretary an annual report on the planning 
        process assisted under this subsection.

``SEC. 204. COST SHARING. <<NOTE: 42 USC 3144.>> 

    ``(a) Federal Share.--Subject to section 205, the amount of a grant 
for a project under this title shall not exceed 50 percent of the cost 
of the project.
    ``(b) Non-Federal Share.--In determining the amount of the non-
Federal share of the cost of a project, the Secretary may provide credit 
toward the non-Federal share for all contributions both in cash and in-
kind, fairly evaluated, including contributions of space, equipment, and 
services.

``SEC. 205. SUPPLEMENTARY GRANTS. <<NOTE: 42 USC 3145.>> 

    ``(a) Definition of Designated Federal Grant Program.--In this 
section, the term `designated Federal grant program' means any Federal 
grant program that--
            ``(1) provides assistance in the construction or equipping 
        of public works, public service, or development facilities;
            ``(2) the Secretary designates as eligible for an allocation 
        of funds under this section; and
            ``(3) assists projects that are--
                    ``(A) eligible for assistance under this title; and
                    ``(B) consistent with a comprehensive economic 
                development strategy.

    ``(b) Supplementary Grants.--
            ``(1) In general.--On the application of an eligible 
        recipient, the Secretary may make a supplementary grant for a 
        project for which the eligible recipient is eligible but, 
        because of the eligible recipient's economic situation, for 
        which the eligible recipient cannot provide the required non-
        Federal share.
            ``(2) Purposes of grants.--Supplementary grants under 
        paragraph (1) may be made for purposes that shall include 
        enabling eligible recipients to use--
                    ``(A) designated Federal grant programs; and
                    ``(B) direct grants authorized under this title.

    ``(c) Requirements Applicable to Supplementary Grants.--
            ``(1) Amount of supplementary grants.--Subject to paragraph 
        (4), the amount of a supplementary grant under this title for a 
        project shall not exceed the applicable percentage of the cost 
        of the project established by regulations promulgated by the 
        Secretary, except that the non-Federal share of the cost of a 
        project (including assumptions of debt) shall not be less than 
        20 percent.
            ``(2) Form of supplementary grants.--In accordance with such 
        regulations as the Secretary may promulgate, the Secretary shall 
        make supplementary grants by increasing the amounts of grants 
        authorized under this title or by the payment of funds made 
        available under this Act to the heads of the Federal agencies 
        responsible for carrying out the applicable Federal programs.
            ``(3) Federal share limitations specified in other laws.--
        Notwithstanding any requirement as to the amount or source of 
        non-Federal funds that may be applicable to a Federal program, 
        funds provided under this section may be

[[Page 112 STAT. 3604]]

        used to increase the Federal share for specific projects under 
        the program that are carried out in areas described in section 
        301(a) above the Federal share of the cost of the project 
        authorized by the law governing the program.
            ``(4) Lower non-federal share.--
                    ``(A) Indian tribes.--In the case of a grant to an 
                Indian tribe, the Secretary may reduce the non-Federal 
                share below the percentage specified in paragraph (1) or 
                may waive the non-Federal share.
                    ``(B) Certain states, political subdivisions, and 
                nonprofit organizations.--In the case of a grant to a 
                State, or a political subdivision of a State, that the 
                Secretary determines has exhausted its effective taxing 
                and borrowing capacity, or in the case of a grant to a 
                nonprofit organization that the Secretary determines has 
                exhausted its effective borrowing capacity, the 
                Secretary may reduce the non-Federal share below the 
                percentage specified in paragraph (1).

``SEC. 206. REGULATIONS ON RELATIVE NEEDS AND ALLOCATIONS. <<NOTE: 42 
            USC 3146.>> 

    ``In promulgating rules, regulations, and procedures for assistance 
under this title, the Secretary shall ensure that--
            ``(1) the relative needs of eligible areas are given 
        adequate consideration by the Secretary, as determined based on, 
        among other relevant factors--
                    ``(A) the severity of the rates of unemployment in 
                the eligible areas and the duration of the unemployment;
                    ``(B) the income levels and the extent of 
                underemployment in eligible areas; and
                    ``(C) the outmigration of population from eligible 
                areas and the extent to which the outmigration is 
                causing economic injury in the eligible areas; and
            ``(2) allocations of assistance under this title are 
        prioritized to ensure that the level of economic distress of an 
        area, rather than a preference for a geographic area or a 
        specific type of economic distress, is the primary factor in 
        allocating the assistance.
``SEC. 207. GRANTS <<NOTE: 42 USC 3147.>>  FOR TRAINING, RESEARCH, 
                          AND TECHNICAL ASSISTANCE.

    ``(a) In General.--
            ``(1) Grants.--On the application of an eligible recipient, 
        the Secretary may make grants for training, research, and 
        technical assistance, including grants for program evaluation 
        and economic impact analyses, that would be useful in 
        alleviating or preventing conditions of excessive unemployment 
        or underemployment.
            ``(2) Types of assistance.--Grants under paragraph (1) may 
        be used for--
                    ``(A) project planning and feasibility studies;
                    ``(B) demonstrations of innovative activities or 
                strategic economic development investments;
                    ``(C) management and operational assistance;
                    ``(D) establishment of university centers;
                    ``(E) establishment of business outreach centers;
                    ``(F) studies evaluating the needs of, and 
                development potential for, economic growth of areas that 
                the Secretary determines have substantial need for the 
                assistance; and

[[Page 112 STAT. 3605]]

                    ``(G) other activities determined by the Secretary 
                to be appropriate.
            ``(3) Reduction or waiver of non-federal share.--In the case 
        of a project assisted under this section, the Secretary may 
        reduce or waive the non-Federal share, without regard to section 
        204 or 205, if the Secretary finds that the project is not 
        feasible without, and merits, such a reduction or waiver.

    ``(b) Methods of Provision of Assistance.--In providing research and 
technical assistance under this section, the Secretary, in addition to 
making grants under subsection (a), may--
            ``(1) provide research and technical assistance through 
        officers or employees of the Department;
            ``(2) pay funds made available to carry out this section to 
        Federal agencies; or
            ``(3) employ private individuals, partnerships, businesses, 
        corporations, or appropriate institutions under contracts 
        entered into for that purpose.

``SEC. 208. PREVENTION OF UNFAIR COMPETITION. <<NOTE: 42 USC 3148.>> 

    ``No financial assistance under this Act shall be extended to any 
project when the result would be to increase the production of goods, 
materials, or commodities, or the availability of services or 
facilities, when there is not sufficient demand for such goods, 
materials, commodities, services, or facilities, to employ the efficient 
capacity of existing competitive commercial or industrial enterprises.

``SEC. 209. GRANTS FOR ECONOMIC ADJUSTMENT. <<NOTE: 42 USC 3149.>> 

    ``(a) In General.--On the application of an eligible recipient, the 
Secretary may make grants for development of public facilities, public 
services, business development (including funding of a revolving loan 
fund), planning, technical assistance, training, and any other 
assistance to alleviate long-term economic deterioration and sudden and 
severe economic dislocation and further the economic adjustment 
objectives of this title.
    ``(b) Criteria for Assistance.--The Secretary may provide assistance 
under this section only if the Secretary determines that--
            ``(1) the project will help the area to meet a special need 
        arising from--
                    ``(A) actual or threatened severe unemployment; or
                    ``(B) economic adjustment problems resulting from 
                severe changes in economic conditions; and
            ``(2) the area for which a project is to be carried out has 
        a comprehensive economic development strategy and the project is 
        consistent with the strategy, except that this paragraph shall 
        not apply to planning projects.

    ``(c) Particular Community Assistance.--Assistance under this 
section may include assistance provided for activities identified by 
communities, the economies of which are injured by--
            ``(1) military base closures or realignments, defense 
        contractor reductions in force, or Department of Energy defense-
        related funding reductions, for help in diversifying their 
        economies through projects to be carried out on Federal 
        Government installations or elsewhere in the communities;
            ``(2) disasters or emergencies, in areas with respect to 
        which a major disaster or emergency has been declared under the 
        Robert T. Stafford Disaster Relief and Emergency Assistance Act 
        (42 U.S.C. 5121 et seq.), for post-disaster economic recovery;

[[Page 112 STAT. 3606]]

            ``(3) international trade, for help in economic 
        restructuring of the communities; or
            ``(4) fishery failures, in areas with respect to which a 
        determination that there is a commercial fishery failure has 
        been made under section 312(a) of the Magnuson-Stevens Fishery 
        Conservation and Management Act (16 U.S.C. 1861a(a)).

    ``(d) Direct Expenditure or Redistribution by Recipient.--
            ``(1) In general.--Subject to paragraph (2), an eligible 
        recipient of a grant under this section may directly expend the 
        grant funds or may redistribute the funds to public and private 
        entities in the form of a grant, loan, loan guarantee, payment 
        to reduce interest on a loan guarantee, or other appropriate 
        assistance.
            ``(2) Limitation.--Under paragraph (1), an eligible 
        recipient may not provide any grant to a private for-profit 
        entity.

``SEC. 210. CHANGED PROJECT CIRCUMSTANCES. <<NOTE: 42 USC 3150.>> 

    ``In any case in which a grant (including a supplementary grant 
described in section 205) has been made by the Secretary under this 
title (or made under this Act, as in effect on the day before the 
effective date of the Economic Development Administration Reform Act of 
1998) for a project, and, after the grant has been made but before 
completion of the project, the purpose or scope of the project that was 
the basis of the grant is modified, the Secretary may approve, subject 
(except for a grant for which funds were obligated in fiscal year 1995) 
to the availability of appropriations, the use of grant funds for the 
modified project if the Secretary determines that--
            ``(1) the modified project meets the requirements of this 
        title and is consistent with the comprehensive economic 
        development strategy submitted as part of the application for 
        the grant; and
            ``(2) the modifications are necessary to enhance economic 
        development in the area for which the project is being carried 
        out.
``SEC. 211. USE <<NOTE: 42 USC 3151.>>  OF FUNDS IN PROJECTS 
                          CONSTRUCTED UNDER PROJECTED COST.

    ``In any case in which a grant (including a supplementary grant 
described in section 205) has been made by the Secretary under this 
title (or made under this Act, as in effect on the day before the 
effective date of the Economic Development Administration Reform Act of 
1998) for a construction project, and, after the grant has been made but 
before completion of the project, the cost of the project based on the 
designs and specifications that was the basis of the grant has decreased 
because of decreases in costs--
            ``(1) the Secretary may approve, subject to the availability 
        of appropriations, the use of the excess funds or a portion of 
        the funds to improve the project; and
            ``(2) any amount of excess funds remaining after application 
        of paragraph (1) shall be deposited in the general fund of the 
        Treasury.

``SEC. 212. REPORTS BY RECIPIENTS. <<NOTE: 42 USC 3152.>> 

    ``(a) In General.--Each <<NOTE: Regulations.>>  recipient of 
assistance under this title shall submit reports to the Secretary at 
such intervals and in such manner as the Secretary shall require by 
regulation, except

[[Page 112 STAT. 3607]]

that no report shall be required to be submitted more than 10 years 
after the date of closeout of the assistance award.

    ``(b) Contents.--Each report shall contain an evaluation of the 
effectiveness of the economic assistance provided under this title in 
meeting the need that the assistance was designed to address and in 
meeting the objectives of this Act.
``SEC. 213. PROHIBITION <<NOTE: 42 USC 3153.>>  ON USE OF FUNDS 
                          FOR ATTORNEY'S AND CONSULTANT'S FEES.

    ``Assistance made available under this title shall not be used 
directly or indirectly for an attorney's or consultant's fee incurred in 
connection with obtaining grants and contracts under this title.

 ``TITLE III--ELIGIBILITY; COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES

``SEC. 301. ELIGIBILITY OF AREAS. <<NOTE: 42 USC 3161.>> 

    ``(a) In General.--For a project to be eligible for assistance under 
section 201 or 209, the project shall be located in an area that, on the 
date of submission of the application, meets 1 or more of the following 
criteria:
            ``(1) Low per capita income.--The area has a per capita 
        income of 80 percent or less of the national average.
            ``(2) Unemployment rate above national average.--The area 
        has an unemployment rate that is, for the most recent 24-month 
        period for which data are available, at least 1 percent greater 
        than the national average unemployment rate.
            ``(3) Unemployment or economic adjustment problems.--The 
        area is an area that the Secretary determines has experienced or 
        is about to experience a special need arising from actual or 
        threatened severe unemployment or economic adjustment problems 
        resulting from severe short-term or long-term changes in 
        economic conditions.

    ``(b) Political Boundaries of Areas.--An area that meets 1 or more 
of the criteria of subsection (a), including a small area of poverty or 
high unemployment within a larger community in less economic distress, 
shall be eligible for assistance under section 201 or 209 without regard 
to political or other subdivisions or boundaries.
    ``(c) Documentation.--
            ``(1) In general.--A determination of eligibility under 
        subsection (a) shall be supported by the most recent Federal 
        data available, or, if no recent Federal data is available, by 
        the most recent data available through the government of the 
        State in which the area is located.
            ``(2) Acceptance by secretary.--The documentation shall be 
        accepted by the Secretary unless the Secretary determines that 
        the documentation is inaccurate.

    ``(d) Prior Designations.--Any designation of a redevelopment area 
made before the effective date of the Economic Development 
Administration Reform Act of 1998 shall not be effective after that 
effective date.

[[Page 112 STAT. 3608]]

``SEC. 302. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES. <<NOTE: 42 
            USC 3162.>> 

    ``(a) In General.--The Secretary may provide assistance under 
section 201 or 209 (except for planning assistance under section 209) to 
an eligible recipient for a project only if the eligible recipient 
submits to the Secretary, as part of an application for the assistance--
            ``(1) an identification of the economic development problems 
        to be addressed using the assistance;
            ``(2) an identification of the past, present, and projected 
        future economic development investments in the area receiving 
        the assistance and public and private participants and sources 
        of funding for the investments; and
            ``(3)(A) a comprehensive economic development strategy for 
        addressing the economic problems identified under paragraph (1) 
        in a manner that promotes economic development and opportunity, 
        fosters effective transportation access, enhances and protects 
        the environment, and balances resources through sound management 
        of development; and
            ``(B) a description of how the strategy will solve the 
        problems.

    ``(b) Approval of Comprehensive Economic Development Strategy.--The 
Secretary shall approve a comprehensive economic development strategy 
that meets the requirements of subsection (a) to the satisfaction of the 
Secretary.
    ``(c) Approval of Other Plan.--The Secretary may accept as a 
comprehensive economic development strategy a satisfactory plan 
developed under another federally supported program.

               ``TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

``SEC. 401. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS. <<NOTE: 42 
            USC 3171.>> 

    ``(a) In General.--In order that economic development projects of 
broad geographic significance may be planned and carried out, the 
Secretary may designate appropriate economic development districts in 
the United States, with the concurrence of the States in which the 
districts will be wholly or partially located, if--
            ``(1) the proposed district is of sufficient size or 
        population, and contains sufficient resources, to foster 
        economic development on a scale involving more than a single 
        area described in section 301(a);
            ``(2) the proposed district contains at least 1 area 
        described in section 301(a); and
            ``(3) the proposed district has a comprehensive economic 
        development strategy that--
                    ``(A) contains a specific program for intra-district 
                cooperation, self-help, and public investment; and
                    ``(B) is approved by each affected State and by the 
                Secretary.

    ``(b) Authorities.--The Secretary may, under regulations promulgated 
by the Secretary--
            ``(1) invite the States to determine boundaries for proposed 
        economic development districts;
            ``(2) cooperate with the States--

[[Page 112 STAT. 3609]]

                    ``(A) in sponsoring and assisting district economic 
                planning and economic development groups; and
                    ``(B) in assisting the district groups in 
                formulating comprehensive economic development 
                strategies for districts; and
            ``(3) encourage participation by appropriate local 
        government entities in the economic development districts.
``SEC. 402.  <<NOTE: Regulations. 42 USC 3172.>> TERMINATION OR 
                          MODIFICATION OF ECONOMIC DEVELOPMENT 
                          DISTRICTS.

    ``The Secretary shall, by regulation, promulgate standards for the 
termination or modification of the designation of economic development 
districts.

``SEC. <<NOTE: Regulations. 42 USC 3173.>> 403. INCENTIVES.

    ``(a) In General.--Subject to the non-Federal share requirement 
under section 205(c)(1), the Secretary may increase the amount of grant 
assistance for a project in an economic development district by an 
amount that does not exceed 10 percent of the cost of the project, in 
accordance with such regulations as the Secretary shall promulgate, if--
            ``(1) the project applicant is actively participating in the 
        economic development activities of the district; and
            ``(2) the project is consistent with the comprehensive 
        economic development strategy of the district.

    ``(b) Review of Incentive System.--In promulgating regulations under 
subsection (a), the Secretary shall review the current incentive system 
to ensure that the system is administered in the most direct and 
effective manner to achieve active participation by project applicants 
in the economic development activities of economic development 
districts.
``SEC. 404. PROVISION <<NOTE: 42 USC 3174.>>  OF COMPREHENSIVE 
                          ECONOMIC DEVELOPMENT STRATEGIES TO 
                          APPALACHIAN REGIONAL COMMISSION.

    ``If any part of an economic development district is in the 
Appalachian region (as defined in section 403 of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.)), the economic 
development district shall ensure that a copy of the comprehensive 
economic development strategy of the district is provided to the 
Appalachian Regional Commission established under that Act.
``SEC. 405. ASSISTANCE <<NOTE: 42 USC 3175.>>  TO PARTS OF 
                          ECONOMIC DEVELOPMENT DISTRICTS NOT IN 
                          ELIGIBLE AREAS.

    ``Notwithstanding section 301, the Secretary may provide such 
assistance as is available under this Act for a project in a part of an 
economic development district that is not in an area described in 
section 301(a), if the project will be of a substantial direct benefit 
to an area described in section 301(a) that is located in the district.

[[Page 112 STAT. 3610]]

                        ``TITLE V--ADMINISTRATION

``SEC. 501. ASSISTANT <<NOTE: 42 USC 3191.>>  SECRETARY FOR ECONOMIC 
            DEVELOPMENT.

    ``(a) In General.--The <<NOTE: President.>>  Secretary shall carry 
out this Act through an Assistant Secretary of Commerce for Economic 
Development, to be appointed by the President, by and with the advice 
and consent of the Senate.

    ``(b) Compensation.--The Assistant Secretary of Commerce for 
Economic Development shall be compensated at the rate payable for level 
IV of the Executive Schedule under section 5315 of title 5, United 
States Code.
    ``(c) Duties.--The Assistant Secretary of Commerce for Economic 
Development shall carry out such duties as the Secretary shall require 
and shall serve as the administrator of the Economic Development 
Administration of the Department.

``SEC. 502. <<NOTE: 42 USC 3192.>> ECONOMIC DEVELOPMENT INFORMATION 
            CLEARINGHOUSE.

    ``In carrying out this Act, the Secretary shall--
            ``(1) maintain a central information clearinghouse on 
        matters relating to economic development, economic adjustment, 
        disaster recovery, defense conversion, and trade adjustment 
        programs and activities of the Federal and State governments, 
        including political subdivisions of States;
            ``(2) assist potential and actual applicants for economic 
        development, economic adjustment, disaster recovery, defense 
        conversion, and trade adjustment assistance under Federal, 
        State, and local laws in locating and applying for the 
        assistance; and
            ``(3) assist areas described in section 301(a) and other 
        areas by providing to interested persons, communities, 
        industries, and businesses in the areas any technical 
        information, market research, or other forms of assistance, 
        information, or advice that would be useful in alleviating or 
        preventing conditions of excessive unemployment or 
        underemployment in the areas.

``SEC. 503. <<NOTE: 42 USC 3193.>> CONSULTATION WITH OTHER PERSONS AND 
            AGENCIES.

    ``(a) Consultation on Problems Relating to Employment.--The 
Secretary may consult with any persons, including representatives of 
labor, management, agriculture, and government, who can assist in 
addressing the problems of area and regional unemployment or 
underemployment.
    ``(b) Consultation on Administration of Act.--The Secretary may 
provide for such consultation with interested Federal agencies as the 
Secretary determines to be appropriate in the performance of the duties 
of the Secretary under this Act.

``SEC. 504. ADMINISTRATION, OPERATION, AND MAINTENANCE. <<NOTE: 42 USC 
            3194.>> 

    ``The Secretary shall approve Federal assistance under this Act only 
if the Secretary is satisfied that the project for which Federal 
assistance is granted will be properly and efficiently administered, 
operated, and maintained.

``SEC. 505. BUSINESSES DESIRING FEDERAL CONTRACTS. <<NOTE: 42 USC 
            3195.>> 

    ``The Secretary may provide the procurement divisions of Federal 
agencies with a list consisting of--
            ``(1) the names and addresses of businesses that are located 
        in areas described in section 301(a) and that wish to obtain

[[Page 112 STAT. 3611]]

         Federal Government contracts for the provision of supplies or 
        services; and
            ``(2) the supplies and services that each business provides.

``SEC. 506. PERFORMANCE EVALUATIONS OF GRANT RECIPIENTS. <<NOTE: 42 USC 
            3196.>> 

    ``(a) In General.--The Secretary shall conduct an evaluation of each 
university center and each economic development district that receives 
grant assistance under this Act (each referred to in this section as a 
`grantee') to assess the grantee's performance and contribution toward 
retention and creation of employment.
    ``(b) Purpose of Evaluations of University Centers.--The purpose of 
the evaluations of university centers under subsection (a) shall be to 
determine which university centers are performing well and are worthy of 
continued grant assistance under this Act, and which should not receive 
continued assistance, so that university centers that have not 
previously received assistance may receive assistance.
    ``(c) Timing of Evaluations.--Evaluations under subsection (a) shall 
be conducted on a continuing basis so that each grantee is evaluated 
within 3 years after the first award of assistance to the grantee after 
the effective date of the Economic Development Administration Reform Act 
of 1998, and at least once every 3 years thereafter, so long as the 
grantee receives the assistance.
    ``(d) Evaluation Criteria.--
            ``(1) Establishment.--The Secretary shall establish criteria 
        for use in conducting evaluations under subsection (a).
            ``(2) Evaluation criteria for university centers.--The 
        criteria for evaluation of a university center shall, at a 
        minimum, provide for an assessment of the center's contribution 
        to providing technical assistance, conducting applied research, 
        and disseminating results of the activities of the center.
            ``(3) Evaluation criteria for economic development 
        districts.--The criteria for evaluation of an economic 
        development district shall, at a minimum, provide for an 
        assessment of management standards, financial accountability, 
        and program performance.

    ``(e) Peer Review.--In conducting an evaluation of a university 
center or economic development district under subsection (a), the 
Secretary shall provide for the participation of at least 1 other 
university center or economic development district, as appropriate, on a 
cost-reimbursement basis.

``SEC. 507. NOTIFICATION OF REORGANIZATION. <<NOTE: Deadline. 42 USC 
            3197.>> 

    ``Not later than 30 days before the date of any reorganization of 
the offices, programs, or activities of the Economic Development 
Administration, the Secretary shall provide notification of the 
reorganization to the Committee on Environment and Public Works and the 
Committee on Appropriations of the Senate, and the Committee on 
Transportation and Infrastructure and the Committee on Appropriations of 
the House of Representatives.

                        ``TITLE VI--MISCELLANEOUS

``SEC. 601. POWERS OF SECRETARY. <<NOTE: 42 USC 3211.>> 

    ``(a) In General.--In carrying out the duties of the Secretary under 
this Act, the Secretary may--

[[Page 112 STAT. 3612]]

            ``(1) adopt, alter, and use a seal, which shall be 
        judicially noticed;
            ``(2) subject to the civil service and classification laws, 
        select, employ, appoint, and fix the compensation of such 
        personnel as are necessary to carry out this Act;
            ``(3) hold such hearings, sit and act at such times and 
        places, and take such testimony, as the Secretary determines to 
        be appropriate;
            ``(4) request directly, from any Federal agency, board, 
        commission, office, or independent establishment, such 
        information, suggestions, estimates, and statistics as the 
        Secretary determines to be necessary to carry out this Act (and 
        each Federal agency, board, commission, office, or independent 
        establishment may provide such information, suggestions, 
        estimates, and statistics directly to the Secretary);
            ``(5) <<NOTE: Regulations.>> under regulations promulgated 
        by the Secretary--
                    ``(A) assign or sell at public or private sale, or 
                otherwise dispose of for cash or credit, in the 
                Secretary's discretion and on such terms and conditions 
                and for such consideration as the Secretary determines 
                to be reasonable, any evidence of debt, contract, claim, 
                personal property, or security assigned to or held by 
                the Secretary in connection with assistance provided 
                under this Act; and
                    ``(B) collect or compromise all obligations assigned 
                to or held by the Secretary in connection with that 
                assistance until such time as the obligations are 
                referred to the Attorney General for suit or collection;
            ``(6) deal with, complete, renovate, improve, modernize, 
        insure, rent, or sell for cash or credit, on such terms and 
        conditions and for such consideration as the Secretary 
        determines to be reasonable, any real or personal property 
        conveyed to or otherwise acquired by the Secretary in connection 
        with assistance provided under this Act;
            ``(7) pursue to final collection, by means of compromise or 
        other administrative action, before referral to the Attorney 
        General, all claims against third parties assigned to the 
        Secretary in connection with assistance provided under this Act;
            ``(8) acquire, in any lawful manner, any property (real, 
        personal, or mixed, tangible or intangible), to the extent 
        appropriate in connection with assistance provided under this 
        Act;
            ``(9) in addition to any powers, functions, privileges, and 
        immunities otherwise vested in the Secretary, take any action, 
        including the procurement of the services of attorneys by 
        contract, determined by the Secretary to be necessary or 
        desirable in making, purchasing, servicing, compromising, 
        modifying, liquidating, or otherwise administratively dealing 
        with assets held in connection with financial assistance 
        provided under this Act;
            ``(10)(A) employ experts and consultants or organizations as 
        authorized by section 3109 of title 5, United States Code, 
        except that contracts for such employment may be renewed 
        annually;
            ``(B) compensate individuals so employed, including 
        compensation for travel time; and
            ``(C) allow individuals so employed, while away from their 
        homes or regular places of business, travel expenses, including 
        per diem in lieu of subsistence, as authorized by section 5703

[[Page 112 STAT. 3613]]

         of title 5, United States Code, for persons employed 
        intermittently in the Federal Government service;
            ``(11) establish performance measures for grants and other 
        assistance provided under this Act, and use the performance 
        measures to evaluate the economic impact of economic development 
        assistance programs under this Act, which establishment and use 
        of performance measures shall be provided by the Secretary 
        through--
                    ``(A) officers or employees of the Department;
                    ``(B) the employment of persons under contracts 
                entered into for such purposes; or
                    ``(C) grants to persons, using funds made available 
                to carry out this Act;
            ``(12) conduct environmental reviews and incur necessary 
        expenses to evaluate and monitor the environmental impact of 
        economic development assistance provided and proposed to be 
        provided under this Act, including expenses associated with the 
        representation and defense of the actions of the Secretary 
        relating to the environmental impact of the assistance, using 
        any funds made available to carry out section 207;
            ``(13) sue and be sued in any court of record of a State 
        having general jurisdiction or in any United States district 
        court, except that no attachment, injunction, garnishment, or 
        other similar process, mesne or final, shall be issued against 
        the Secretary or the property of the Secretary; and
            ``(14) establish such rules, regulations, and procedures as 
        the Secretary considers appropriate for carrying out this Act.

    ``(b) Deficiency Judgments.--The authority under subsection (a)(7) 
to pursue claims shall include the authority to obtain deficiency 
judgments or otherwise pursue claims relating to mortgages assigned to 
the Secretary.
    ``(c) Inapplicability of Certain Other Requirements.--Section 3709 
of the Revised Statutes (41 U.S.C. 5) shall not apply to any contract of 
hazard insurance or to any purchase or contract for services or supplies 
on account of property obtained by the Secretary as a result of 
assistance provided under this Act if the premium for the insurance or 
the amount of the services or supplies does not exceed $1,000.
    ``(d) Property Interests.--
            ``(1) In general.--The powers of the Secretary under this 
        section, relating to property acquired by the Secretary in 
        connection with assistance provided under this Act, shall extend 
        to property interests of the Secretary relating to projects 
        approved under--
                    ``(A) this Act;
                    ``(B) title I of the Public Works Employment Act of 
                1976 (42 U.S.C. 6701 et seq.);
                    ``(C) title II of the Trade Act of 1974 (19 U.S.C. 
                2251 et seq.); and
                    ``(D) the Community Emergency Drought Relief Act of 
                1977 (42 U.S.C. 5184 note; Public Law 95-31).
            ``(2) Release.--The Secretary may release, in whole or in 
        part, any real property interest, or tangible personal property 
        interest, in connection with a grant after the date that is 20 
        years after the date on which the grant was awarded.

    ``(e) Powers of Conveyance and Execution.--The power to convey and 
to execute, in the name of the Secretary, deeds of

[[Page 112 STAT. 3614]]

conveyance, deeds of release, assignments and satisfactions of 
mortgages, and any other written instrument relating to real or personal 
property or any interest in such property acquired by the Secretary 
under this Act may be exercised by the Secretary, or by any officer or 
agent appointed by the Secretary for that purpose, without the execution 
of any express delegation of power or power of attorney.

``SEC. 603. ANNUAL REPORT TO CONGRESS. <<NOTE: Deadline. 42 USC 3213.>> 

    ``Not later than July 1, 2000, and July 1 of each year thereafter, 
the Secretary shall submit to Congress a comprehensive and detailed 
annual report on the activities of the Secretary under this Act during 
the most recently completed fiscal year.
``SEC. 604.  <<NOTE: 42 USC 3214.>> DELEGATION OF FUNCTIONS AND 
                          TRANSFER OF FUNDS AMONG FEDERAL 
                          AGENCIES.

    ``(a) Delegation of Functions to Other Federal Agencies.--The 
Secretary may--
            ``(1) delegate to the heads of other Federal agencies such 
        functions, powers, and duties of the Secretary under this Act as 
        the Secretary determines to be appropriate; and
            ``(2) authorize the redelegation of the functions, powers, 
        and duties by the heads of the agencies.

    ``(b) Transfer of Funds to Other Federal Agencies.--Funds authorized 
to be appropriated to carry out this Act may be transferred between 
Federal agencies, if the funds are used for the purposes for which the 
funds are specifically authorized and appropriated.
    ``(c) Transfer of Funds From Other Federal Agencies.--
            ``(1) In general.--Subject to paragraph (2), for the 
        purposes of this Act, the Secretary may accept transfers of 
        funds from other Federal agencies if the funds are used for the 
        purposes for which (and in accordance with the terms under 
        which) the funds are specifically authorized and appropriated.
            ``(2) Use of funds.--The transferred funds--
                    ``(A) shall remain available until expended; and
                    ``(B) may, to the extent necessary to carry out this 
                Act, be transferred to and merged by the Secretary with 
                the appropriations for salaries and expenses.

``SEC. 605. PENALTIES. <<NOTE: 42 USC 3215.>> 

    ``(a) False Statements; Security Overvaluation.--A person that makes 
any statement that the person knows to be false, or willfully overvalues 
any security, for the purpose of--
            ``(1) obtaining for the person or for any applicant any 
        financial assistance under this Act or any extension of the 
        assistance by renewal, deferment, or action, or by any other 
        means, or the acceptance, release, or substitution of security 
        for the assistance;
            ``(2) influencing in any manner the action of the Secretary; 
        or
            ``(3) obtaining money, property, or any thing of value, 
        under this Act;

shall be fined under title 18, United States Code, imprisoned not more 
than 5 years, or both.
    ``(b) Embezzlement and Fraud-Related Crimes.--A person that is 
connected in any capacity with the Secretary in the administration of 
this Act and that--

[[Page 112 STAT. 3615]]

            ``(1) embezzles, abstracts, purloins, or willfully 
        misapplies any funds, securities, or other thing of value, that 
        is pledged or otherwise entrusted to the person;
            ``(2) with intent to defraud the Secretary or any other 
        person or entity, or to deceive any officer, auditor, or 
        examiner--
                    ``(A) makes any false entry in any book, report, or 
                statement of or to the Secretary; or
                    ``(B) without being duly authorized, draws any order 
                or issue, puts forth, or assigns any note, debenture, 
                bond, or other obligation, or draft, bill of exchange, 
                mortgage, judgment, or decree thereof;
            ``(3) with intent to defraud, participates or shares in or 
        receives directly or indirectly any money, profit, property, or 
        benefit through any transaction, loan, grant, commission, 
        contract, or any other act of the Secretary; or
            ``(4) gives any unauthorized information concerning any 
        future action or plan of the Secretary that might affect the 
        value of securities, or having such knowledge invests or 
        speculates, directly or indirectly, in the securities or 
        property of any company or corporation receiving loans, grants, 
        or other assistance from the Secretary;

shall be fined under title 18, United States Code, imprisoned not more 
than 5 years, or both.
``SEC. 606.  <<NOTE: 42 USC 3216.>> EMPLOYMENT OF EXPEDITERS AND 
                          ADMINISTRATIVE EMPLOYEES.

    ``Assistance shall not be provided by the Secretary under this Act 
to any business unless the owners, partners, or officers of the 
business--
            ``(1) <<NOTE: Certification.>> certify to the Secretary the 
        names of any attorneys, agents, and other persons engaged by or 
        on behalf of the business for the purpose of expediting 
        applications made to the Secretary for assistance of any kind, 
        under this Act, and the fees paid or to be paid to the person 
        for expediting the applications; and
            ``(2) execute an agreement binding the business, for the 2-
        year period beginning on the date on which the assistance is 
        provided by the Secretary to the business, to refrain from 
        employing, offering any office or employment to, or retaining 
        for professional services, any person who, on the date on which 
        the assistance or any part of the assistance was provided, or 
        within the 1-year period ending on that date--
                    ``(A) served as an officer, attorney, agent, or 
                employee of the Department; and
                    ``(B) occupied a position or engaged in activities 
                that the Secretary determines involved discretion with 
                respect to the granting of assistance under this Act.
``SEC. 607.  <<NOTE: Records. 42 USC 3217.>> MAINTENANCE AND 
                          PUBLIC INSPECTION OF LIST OF APPROVED 
                          APPLICATIONS FOR FINANCIAL ASSISTANCE.

    ``(a) In General.--The Secretary shall--
            ``(1) maintain as a permanent part of the records of the 
        Department a list of applications approved for financial 
        assistance under this Act; and
            ``(2) make the list available for public inspection during 
        the regular business hours of the Department.

[[Page 112 STAT. 3616]]

    ``(b) Additions to List.--The following information shall be added 
to the list maintained under subsection (a) as soon as an application 
described in subsection (a)(1) is approved:
            ``(1) The name of the applicant and, in the case of a 
        corporate application, the name of each officer and director of 
        the corporation.
            ``(2) The amount and duration of the financial assistance 
        for which application is made.
            ``(3) The purposes for which the proceeds of the financial 
        assistance are to be used.

``SEC. 608. RECORDS AND AUDITS. <<NOTE: 42 USC 3218.>> 

    ``(a) Recordkeeping and Disclosure Requirements.--Each recipient of 
assistance under this Act shall keep such records as the Secretary shall 
require, including records that fully disclose--
            ``(1) the amount and the disposition by the recipient of the 
        proceeds of the assistance;
            ``(2) the total cost of the project in connection with which 
        the assistance is given or used;
            ``(3) the amount and nature of the portion of the cost of 
        the project provided by other sources; and
            ``(4) such other records as will facilitate an effective 
        audit.

    ``(b) Access to Books for Examination and Audit.--The Secretary, the 
Inspector General of the Department, and the Comptroller General of the 
United States, or any duly authorized representative, shall have access 
for the purpose of audit and examination to any books, documents, 
papers, and records of the recipient that relate to assistance received 
under this Act.

``SEC. 609. RELATIONSHIP TO ASSISTANCE UNDER OTHER LAW. <<NOTE: 42 USC 
            3219.>> 

    ``(a) Previously Authorized Assistance.--Except as otherwise 
provided in this Act, all financial and technical assistance authorized 
under this Act shall be in addition to any Federal assistance authorized 
before the effective date of the Economic Development Administration 
Reform Act of 1998.
    ``(b) Assistance Under Other Acts.--Nothing in this Act authorizes 
or permits any reduction in the amount of Federal assistance that any 
State or other entity eligible under this Act is entitled to receive 
under any other Act.

``SEC. 610. ACCEPTANCE OF CERTIFICATIONS BY APPLICANTS.

    ``Under terms and conditions determined by the Secretary, the 
Secretary may accept the certifications of an applicant for assistance 
under this Act that the applicant meets the requirements of this Act.''.
    (b) Title VII.--The Public Works and Economic Development Act of 
1965 (42 U.S.C. 3121 et seq.) is amended--
            (1) by redesignating section 712 <<NOTE: 42 USC 3222, 
        3212.>> as section 602 and moving that section to appear after 
        section 601 (as amended by subsection (a));
            (2) in section 602 <<NOTE: 42 USC 3212.>> (as added by 
        paragraph (1))--
                    (A) by striking the section heading and all that 
                follows through ``All'' and inserting the following:

``SEC. 602. MAINTENANCE OF STANDARDS.

    ``All''; and
                    (B) by striking ``sections 101, 201, 202, 403, 903, 
                and 1003'' and inserting ``this Act''; and

[[Page 112 STAT. 3617]]

            (3) by striking title VII <<NOTE: 42 USC 3211 et seq.>> (as 
        amended by paragraph (1)) and inserting the following:

                          ``TITLE VII--FUNDING

``SEC. 701. GENERAL AUTHORIZATION OF APPROPRIATIONS. <<NOTE: 42 USC 
            3231.>> 

    ``There are authorized to be appropriated to carry out this Act 
$397,969,000 for fiscal year 1999, $368,000,000 for fiscal year 2000, 
$335,000,000 for fiscal year 2001, $335,000,000 for fiscal year 2002, 
and $335,000,000 for fiscal year 2003, to remain available until 
expended.
``SEC. 702.  <<NOTE: 42 USC 3232.>> AUTHORIZATION OF 
                          APPROPRIATIONS FOR DEFENSE CONVERSION 
                          ACTIVITIES.

    ``(a) In General.--In addition to amounts made available under 
section 701, there are authorized to be appropriated such sums as are 
necessary to carry out section 209(c)(1), to remain available until 
expended.
    ``(b) Pilot Projects.--Funds made available under subsection (a) may 
be used for activities including pilot projects for privatization of, 
and economic development activities for, closed or realigned military or 
Department of Energy installations.
``SEC. 703.  <<NOTE: 42 USC 3233.>> AUTHORIZATION OF 
                          APPROPRIATIONS FOR DISASTER ECONOMIC 
                          RECOVERY ACTIVITIES.

    ``(a) In General.--In addition to amounts made available under 
section 701, there are authorized to be appropriated such sums as are 
necessary to carry out section 209(c)(2), to remain available until 
expended.
    ``(b) Federal Share.--The Federal share of the cost of activities 
funded with amounts made available under subsection (a) shall be up to 
100 percent.''.
    (c) Titles VIII Through X.--The Public Works and Economic 
Development Act of 1965 is amended by striking titles VIII through X (42 
U.S.C. 3231 et seq.).

SEC. 103. CONFORMING AMENDMENT.

    Section 5316 of title 5, United States Code, is amended by striking 
``Administrator for Economic Development.''.

SEC. 104. TRANSITION PROVISIONS. <<NOTE: 42 USC 3121 note.>> 

    (a) Existing Rights, Duties, and Obligations.--This title, including 
the amendments made by this title, does not affect the validity of any 
right, duty, or obligation of the United States or any other person 
arising under any contract, loan, or other instrument or agreement that 
was in effect on the day before the effective date of this title.
    (b) Continuation of Suits.--No action or other proceeding commenced 
by or against any officer or employee of the Economic Development 
Administration shall abate by reason of the enactment of this title.
    (c) Liquidating Account.--The Economic Development Revolving Fund 
established under section 203 of the Public Works and Economic 
Development Act of 1965 (42 U.S.C. 3143) (as in effect on the day before 
the effective date of this title) shall continue to be available to the 
Secretary of Commerce as a liquidating account (as defined in section 
502 of the Federal Credit Reform

[[Page 112 STAT. 3618]]

Act of 1990 (2 U.S.C. 661a)) for payment of obligations and expenses in 
connection with financial assistance provided under--
            (1) the Public Works and Economic Development Act of 1965 
        (42 U.S.C. 3121 et seq.);
            (2) the Area Redevelopment Act (42 U.S.C. 2501 et seq.); and
            (3) the Trade Act of 1974 (19 U.S.C. 2101 et seq.).

    (d) Administration.--The Secretary of Commerce shall take such 
actions authorized before the effective date of this title as are 
appropriate to administer and liquidate grants, contracts, agreements, 
loans, obligations, debentures, or guarantees made by the Secretary 
under law in effect before the effective date of this title.

SEC. 105. EFFECTIVE DATE. <<NOTE: 42 USC 3121 note.>> 

    This title and the amendments made by this title shall take effect 
on a date determined by the Secretary of Commerce, but not later than 90 
days after the date of enactment of this Act.

   TITLE II-- <<NOTE: Appalachian Regional Development Reform Act of 
1998.>> APPALACHIAN REGIONAL DEVELOPMENT

SEC. 201. SHORT TITLE. <<NOTE: 40 USC app. 1 note.>> 

    This title may be cited as the ``Appalachian Regional Development 
Reform Act of 1998''.

SEC. 202. FINDINGS AND PURPOSES.

    Section 2 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is amended by adding at the end the following:
    ``(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; and
                          ``(iii) improving the access of the region's 
                      businesses to the technical and financial 
                      resources necessary to development of the 
                      businesses; and

[[Page 112 STAT. 3619]]

                    ``(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.''.

SEC. 203. MEETINGS.

    (a) Annual Meeting Requirement.--Section 101 of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) by striking ``(a) There'' and inserting the following:

    ``(a) In General.--
            ``(1) Establishment.--There''; and
            (2) by adding at the end the following:
            ``(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 by Electronic Means.--Section 101 of the 
Appalachian Regional Development Act of 1965 (40 U.S.C. App.) is 
amended--
            (1) in subsection (a)(2) (as added by subsection (a)(2)), by 
        adding at the end the following:
                    ``(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.''; and
            (2) in the fourth sentence of subsection (c), by striking 
        ``to be present''.

    (c) Decisions Requiring a Quorum.--Section 101(b) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended by striking 
the third sentence and inserting the following: ``A decision involving 
Commission policy, approval of any State, regional, or subregional 
development plan or implementing investment program, 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.''.

SEC. 204. ADMINISTRATIVE EXPENSES.

    Section 105 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is amended--
            (1) by striking ``(a) For the period'' in the first sentence 
        and all that follows through ``such expenses'' in the second 
        sentence and inserting ``Administrative expenses of the 
        Commission''; and
            (2) by striking subsection (b).

SEC. 205. COMPENSATION OF EMPLOYEES.

    Section 106(2) of the Appalachian Regional Development Act of 1965 
(40 U.S.C. App.) is amended by striking ``the salary of the alternate to 
the Federal Cochairman on the Commission as provided in section 101'' 
and inserting ``the maximum rate of basic pay for the Senior Executive 
Service under section 5382 of title

[[Page 112 STAT. 3620]]

 5, United States Code, including any applicable locality-based 
comparability payment that may be authorized under section 5304(h)(2)(C) 
of that title''.

SEC. 206. ADMINISTRATIVE POWERS OF COMMISSION.

    Section 106(7) of the Appalachian Regional Development Act of 1965 
(40 U.S.C. App.) is amended by striking ``1982'' and inserting ``2001''.

SEC. 207. COST SHARING OF DEMONSTRATION HEALTH PROJECTS.

    (a) Operation Costs.--Section 202(c) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by striking ``100 
per centum of the costs thereof'' in the first sentence and all that 
follows through the period at the end of the second sentence and 
inserting ``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).''.
    (b) Cost Sharing.--Section 202 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by adding at the end 
the following:
    ``(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.''.

    (c) Technical Amendments.--Section 202 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) by striking ``Secretary of Health, Education, and 
        Welfare'' each place it appears and inserting ``Secretary of 
        Health and Human Services''; and
            (2) in subsection (c), by striking the last sentence.
SEC. 208. REPEAL OF LAND STABILIZATION, CONSERVATION, AND EROSION 
                        CONTROL PROGRAM.

    Section 203 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

SEC. 209. REPEAL OF TIMBER DEVELOPMENT PROGRAM.

    Section 204 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

SEC. 210. REPEAL OF MINING AREA RESTORATION PROGRAM.

    Section 205 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

SEC. 211. REPEAL OF WATER RESOURCE SURVEY.

    Section 206 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

[[Page 112 STAT. 3621]]

SEC. 212. COST SHARING OF HOUSING PROJECTS.

    (a) Loans.--Section 207(b) of the Appalachian Regional Development 
Act of 1965 (40 U.S.C. App.) is amended in the first sentence by 
striking ``80 per centum'' and inserting ``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)''.
    (b) Grants.--Section 207(c)(1) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by striking ``80 per 
centum'' and inserting ``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)''.

SEC. 213. REPEAL OF AIRPORT SAFETY IMPROVEMENTS PROGRAM.

    Section 208 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.
SEC. 214. COST SHARING OF VOCATIONAL EDUCATION AND EDUCATION 
                        DEMONSTRATION PROJECTS.

    (a) Operation Costs.--Section 211(b)(3) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by striking ``100 
per centum of the costs thereof'' in the first sentence and all that 
follows through the period at the end of the second sentence and 
inserting ``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).''.
    (b) Cost Sharing.--Section 211 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by adding at the end 
the following:
    ``(c) 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.''.

    (c) Technical Amendments.--Section 211 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) in subsection (a), by striking ``Secretary of Health, 
        Education, and Welfare'' and inserting ``Secretary of 
        Education''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``Secretary of the 
                Department of Health, Education, and Welfare'' and 
                inserting ``Secretary of Education''; and
                    (B) in paragraph (3), by striking the last sentence.

[[Page 112 STAT. 3622]]

SEC. 215. REPEAL OF SEWAGE TREATMENT WORKS PROGRAM.

    Section 212 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

SEC. 216. REPEAL OF AMENDMENTS TO HOUSING ACT OF 1954.

    Section 213 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is repealed.

SEC. 217. SUPPLEMENTS TO FEDERAL GRANT-IN-AID PROGRAMS.

    (a) Availability of Amounts.--Section 214(a) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended in the 
first sentence by striking ``the President is authorized to provide 
funds to the Federal Cochairman to be used'' and inserting ``the Federal 
Cochairman may use amounts made available to carry out this section''.
    (b) Cost Sharing.--Section 214(b) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) by striking ``(b) The Federal'' and inserting the 
        following:

    ``(b) Cost Sharing.--
            ``(1) In general.--The Federal''; and
            (2) by adding at the end the following:
            ``(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) Definition of Federal Grant-in-Aid Programs.-- Section 214(c) of 
the Appalachian Regional Development Act of 1965 (40 U.S.C. App.) is 
amended in the first sentence--
            (1) by striking ``on or before December 31, 1980,''; and
            (2) by striking ``Titles I and IX of the Public Works and 
        Economic Development Act of 1965'' and inserting ``sections 201 
        and 209 of the Public Works and Economic Development Act of 
        1965''.

    (d) Limitation on Covered Road Projects.--Section 214(c) of the 
Appalachian Regional Development Act of 1965 (40 U.S.C. App.) is amended 
in the second sentence by inserting ``authorized by title 23, United 
States Code'' after ``road construction''.

SEC. 218. PROGRAM DEVELOPMENT CRITERIA.

    (a) Considerations.--Section 224(a)(1) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by inserting before 
the semicolon at the end the following: ``or in a severely and 
persistently distressed county or area''.
    (b) Outcome Measurements.--Section 224(a) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) in paragraph (5), by striking the period at the end and 
        inserting ``; and''; and
            (2) by adding at the end the following:

[[Page 112 STAT. 3623]]

            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures may be 
        evaluated.''.

    (c) Removal of Limitations.--Section 224 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended by striking 
subsection (b) and inserting the following:
    ``(b) Limitation.--Financial assistance made available under this 
Act shall not be used to assist establishments relocating from one area 
to another.''.
    (d) Conforming Amendment.--Section 302(b)(1) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended in the 
first sentence by striking ``Notwithstanding'' and all that follows 
through ``the Commission'' and inserting ``The Commission''.

SEC. 219. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

    Part C of title II of the Appalachian Regional Development Act of 
1965 (40 U.S.C. App.) is amended by adding at the end the following:

``SEC. 226. DISTRESSED AND ECONOMICALLY STRONG COUNTIES.

    ``(a) Designations.--
            ``(1)  <<NOTE: Deadline.>> 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

[[Page 112 STAT. 3624]]

        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.''.
SEC. 220. GRANTS FOR ADMINISTRATIVE EXPENSES AND COMMISSION 
                        PROJECTS.

    (a) Availability of Amounts.--Section 302(a) of the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) by striking ``The President'' and inserting ``The 
        Commission''; and
            (2) in paragraphs (1), (2), and (3), by striking ``to the 
        Commission'' each place it appears.

    (b) Cost Sharing.--Section 302(a) of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App.) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking ``75 per 
                centum'' and inserting ``50 percent''; and
                    (B) by redesignating subparagraphs (A), (B), and (C) 
                as clauses (i), (ii), and (iii), respectively;
            (2) by redesignating paragraphs (1), (2), and (3) as 
        subparagraphs (A), (B), and (C), respectively;
            (3) by striking ``(a) The'' and inserting the following:

    ``(a) Authorization To Make Grants.--
            ``(1) In general.--The'';
            (4) by adjusting the margins of subparagraphs (A), (B), and 
        (C) (as redesignated by paragraph (2)) to reflect the amendment 
        made by paragraph (3); and
            (5) by adding at the end the following:

[[Page 112 STAT. 3625]]

            ``(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.''.

    (c) Conforming and Technical Amendments.--
            (1) Section 302 of the Appalachian Regional Development Act 
        of 1965 (40 U.S.C. App.) is amended--
                    (A) in subsection (b)--
                          (i) in paragraph (2), by striking ``Federal 
                      Energy Administration, the Energy Research and 
                      Development Administration'' and inserting 
                      ``Secretary of Energy''; and
                          (ii) by striking paragraphs (3) and (4); and
                    (B) by striking subsections (d) and (e).
            (2) Section 210(a) of title 35, United States Code, is 
        amended--
                    (A) by striking paragraph (11); and
                    (B) by redesignating paragraphs (12) through (22) as 
                paragraphs (11) through (21), respectively.
SEC. 221. AUTHORIZATION OF APPROPRIATIONS FOR GENERAL PROGRAM.

    Section 401 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is amended to read as follows:

``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. 222. EXTENSION OF TERMINATION DATE.

    Section 405 of the Appalachian Regional Development Act of 1965 (40 
U.S.C. App.) is amended by striking ``1982'' and inserting ``2001''.

[[Page 112 STAT. 3626]]

SEC. 223. TECHNICAL AMENDMENT.

    Section 5334(a) of title 5, United States Code, is amended in the 
second sentence by striking ``title 40, appendix, or by a regional 
commission established pursuant to section 3182 of title 42, under 
section 3186(a)(2) of that title'' and inserting ``the Appalachian 
Regional Development Act of 1965 (40 U.S.C. App.)''.

    Approved November 13, 1998.

LEGISLATIVE HISTORY--S. 2364:
---------------------------------------------------------------------------

SENATE REPORTS: No. 105-332 (Comm. on Environment and Public Works).
CONGRESSIONAL RECORD, Vol. 144 (1998):
            Oct. 12, considered and passed Senate.
            Oct. 13, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998):
            Nov. 13, Presidential statement.

                                  <all>