The Appalachian Regional Commission (www.arc.gov) is a federal-state partnership that works with the people of Appalachia to create opportunities for self-sustaining economic development and improved quality of life. The commission is a unique alliance composed of the governors of the 13 Appalachian states and a presidential appointee representing the federal government. Governor Lee serves on the board; the Governor’s Alternate for Tennessee is Brooxie Carlton, and the Program Manager is Brooxie Carlton. Through ARC, Tennessee is able to award grants each year for economic and community development projects in the 52 counties in middle and east Tennessee served by the ARC.
The amount of ARC funding depends on the level of appropriations from Congress and the allocation formula for each program approved by the states and the federal co-chairman. Each state receives an allocation of funds and does not compete with other states. In fiscal 2020, Tennessee's allocation of ARC funds for community and economic development funds was approximately:
Area Development: $3,923,00
Distressed Counties: $1,922,00
Local Development Districts: $507,00
There is more flexibility in the utilization of ARC funds than in most other federally funded programs. The primary reason for this is ARC's institutional structure, in which the states have a meaningful role to play in establishing the priorities and implementing regulations and are the originators of grant applications. In addition to this, it is possible to request a waiver of regulations when these prevent a particular grant from being approved
Each state establishes its own priorities for the use of ARC funds in the non-highway program. Highway funds are earmarked for specific highways by congressional action, and the administrative money for the development districts is earmarked for that purpose.
Within Tennessee, the first priority for the use of ARC funds is the economic development projects where water, wastewater, rail, etc. are provided to a locating or expanding industry. The second priority is for the provision of basic water and wastewater service in rural areas where such services are missing or inadequate. A third priority, "opportunity projects", is the ability of the governor to respond to unique problems or opportunities that are presented by a community.