The National Endowment for the Arts has supported the Local Arts Agency Development Program since 1984 through a test program funded for $8 million with funds from one-time federal grants and matching state and local funding sources. In many communities the amount of local government financial support exceeded the matching requirements, indicating a growing interaction between local arts agencies and local governments. As a result, the National Endowment for the Arts requested permanent funding for this project, and a hearing was held to determine if this program would sustain arts resources and insure leadership availability and cooperation. Verbal statements were presented by: (1) Frank Hodsoll, Chairperson, National Endowment for the Arts and Chairman, National Council on the Arts; (2) Mike Lowry, Congressman (Washington); (3) Kjristine Lund, Director, King County (Washington) Arts Commission; (4) Judith Meltzer, arts resource specialist, Seattle (Washington) Public Schools; (5) Carl Petrick, Director, Seattle (Washington) Arts Commission; and (6) David E. Skinner, American Council for the Arts representative. Ten prepared statements are also included. (JHP)