Oracle 11g Release 2

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CREATE TABLE t
    ("GRP" int, "STATE" varchar2(2), "PRIORITY" int)
;

INSERT ALL 
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (1, 'MI', 1)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (1, 'IA', 2)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (1, 'CA', 3)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (1, 'ND', 4)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (1, 'AZ', 5)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (2, 'IA', 2)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (2, 'NJ', 1)
    INTO t ("GRP", "STATE", "PRIORITY")
         VALUES (2, 'NH', 3)
SELECT * FROM dual
;
8 rows affected

SELECT t.grp, level, ltrim(SYS_CONNECT_BY_PATH(state,','),',')   as "set"  
   from  t 
   start with priority = 1
 connect by   priority = prior priority + 1
            and grp = prior grp


GRP
LEVEL
set


1
1
MI

1
2
MI,IA

1
3
MI,IA,CA

1
4
MI,IA,CA,ND

1
5
MI,IA,CA,ND,AZ

2
1
NJ

2
2
NJ,IA

2
3
NJ,IA,NH


with t2 AS
( 
  select t.*, row_number() 
        over ( partition by grp order by priority) as rn from t
)
SELECT t2.grp, ltrim(SYS_CONNECT_BY_PATH(state,','),',')   as "set"
   from  t2 
   start with priority = 1
 connect by   rn = prior rn + 1
            and grp = prior grp


GRP
set


1
MI

1
MI,IA

1
MI,IA,CA

1
MI,IA,CA,ND

1
MI,IA,CA,ND,AZ

2
NJ

2
NJ,IA

2
NJ,IA,NH

GRP	LEVEL	set
1	1	MI
1	2	MI,IA
1	3	MI,IA,CA
1	4	MI,IA,CA,ND
1	5	MI,IA,CA,ND,AZ
2	1	NJ
2	2	NJ,IA
2	3	NJ,IA,NH