The Appalachian Regional Commission (ARC) used its $105 million appropriation for fiscal year 1987 to support three major program areas in the 13 state region: (1) creating and retaining regional jobs; (2) assisting in construction of basic facilities, particularly water and sewer systems, in the region's 90 poorest counties; and (3) working toward completion of the Appalachian Development Highway System. Economic and human resource development activities focused on community infrastructure, vocational training, assistance to small businesses, and "regional program initiatives," a new category. This latter category included support for 63 school dropout prevention projects; 31 adult literacy programs; educational programs promoting entrepreneurship; education programs tailored to the needs of specific business sectors; health care services for rural and indigent populations; and technology transfer projects addressing industrial obsolescence or new employment opportunities. ARC compiled and analyzed social and economic data on the region, by county, and supported studies to identify areas that could be strong regional research and development centers and also to: assess the effect of changes in the Medicare payment system on rural hospitals; study medical indigence; analyze the economic development potential of continuing care retirement communities; and evaluate education reform undertaken in rural and small school districts since 1983. The report includes details on appropriations and distribution of funding by project type and by state; state and regional maps; a directory of local development districts; and county population change data. (SV)