ARC PROJECT GUIDELINES 1 

ARC Project Guidelines 

Revised 2011 

Introduction 

On November 22, 2010, the Appalachian Regional Commission approved Moving Appalachia 

Forward: Appalachian Regional Commission Strategic Plan 2011–2016. Following adoption of 

the Plan, a revision of the ARC governing Code was undertaken to develop programs and policies 

to carry out the goals and objectives set forth in the Plan. Pursuant to Section 6.6 of the Code, the 

following project guidelines are established. The guidelines set forth the criteria for approval of 

ARC projects reflecting the requirements of the Appalachian Regional Development Act of 1965 

(ARDA), as amended, the ARC Code, and the provisions of the ARC Strategic Plan. 

In accordance with Section 6.6 of the ARC Code, the Commission may, from time to time, 

approve additional Policy Statements concerning the implementation of Commission Area 

Development Programs. These Policy Statements will be included as appendices to these 

guidelines. 

Appalachian Regional Development Act 

The statutory criteria for approval of ARC projects are found mainly in Sections 223, 224, 225, 

and 303 of the ARDA (40 U.S.C. 14322, 14523, 14524 and 14525). Primarily, ARC approval 

requires a determination by the Commission that the project will contribute to the development of 

the Appalachian Region (Section 223). The pertinent provisions of these sections may be 

summarized as follows: 

 In approving a particular project, the Commission must also consider whether the project will 

improve, on a continuing rather than a temporary basis, the opportunities for employment, the 

average level of income, or the economic and social development of the area served by the 

project (Section 224). 

 The Commission must also consider the importance of the project or class of project in 

relation to other projects or classes of projects which may be in competition for the same 

funds (Section 224). 

 For each project, the Commission must consider the relative financial resources available to 

the applicant (i.e. its “ability-to-pay”) (Section 224) and determine that there is adequate 

assurance that the project will be properly administered, operated, and maintained (Section 

303). 

 To receive ARC approval, a project must implement the Development Plan of the 

Appalachian State in which it is located and it must have been identified by the state in its 

annual Strategy Statement (Sections 225 and 303). 

 Applications for ARC assistance are made through the state member of the Commission 

representing the applicant and are submitted to the ARC Federal Co-Chairman for approval. 

Approval requires a certification by the state member and a determination by the Federal CoChairman that the project meets the requirements for assistance (Section 303). 

 ARC grants that are administered for the Commission by a basic federal agency must also 

meet the applicable requirements of that agency (Sections 214 and 223). 
ARC PROJECT GUIDELINES 2 

ARC Code: General Project Approval Criterion 

The strategic planning process undertaken by the Commission generated four goals that define 

social and economic conditions that must be created to realize ARC's vision. These goals now 

guide the Commission strategies and program investments. The ARC strategic goals are: 

Goal 1—Job Growth: Increase job opportunities and per capita income in 

Appalachia to reach parity with the nation. 

Goal 2—People: Strengthen the capacity of the people of Appalachia to compete 

in the global economy. 

Goal 3—Infrastructure: Develop and improve Appalachia’s infrastructure to 

make the Region economically competitive. 

Goal 4—Highways: Build the Appalachian Development Highway System to 

reduce Appalachia’s isolation. 

The ARC Code provides a single general project approval criterion to reflect the importance of its 

strategic goals. That criterion is found in Section 7.3 of the Code, which requires that each project 

for which ARC approval is requested be supported by a demonstration that it will contribute to 

the achievement of one or more of the Commission's strategic goals. (A limited exception to this 

criterion is recognized for individual projects that take advantage of special development 

opportunities or respond to emergency economic distress.) 

Section 1—Objectives 

The demonstration required by Section 7.3 of the Code may be accomplished most effectively by 

explaining how the proposed project moves the region closer to one or more of the objectives 

specifically identified for each goal area in the ARC Strategic Plan or additional objectives 

identified by a state in its Commission-approved Plan or Annual Strategy Statement. The 

Commission's objectives for each goal area are set out below. 

Goal 1—Job Growth–Objectives 

a. Develop leaders and strengthen community capacity. 

b. Diversify the economic base. 

c. Enhance entrepreneurial activity in the Region. 

d. Develop and market strategic assets for local economies. 

e. Increase the domestic and global competitiveness of the existing economic base. 

f. Foster the development and use of innovative technologies. 

g. Capitalize on the economic potential of the Appalachian Development Highway System. 

h. Encourage sustainable economic use of natural resources. 

i. Encourage investments in energy projects that create jobs. 

Goal 2—People–Objectives 

a. Develop leaders and strengthen community capacity. 

b. Enhance workforce skills through training and education. 

c. Increase access to quality child care and early childhood education. 
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d. Increase educational attainment and achievement. 

e. Expand community-based wellness and disease-prevention efforts. 

f. Increase the availability of affordable, high-quality health care. 

Goal 3—Infrastructure–Objectives 

a. Develop leaders and strengthen community capacity. 

b. Build and enhance basic infrastructure. 

c. Increase access to and use of telecommunications technology. 

d. Preserve and enhance environmental assets. 

e. Promote the development of an Intermodal Transportation Network. 

Goal 4—Highways–Objectives 

a. Develop leaders and strengthen community capacity. 

b. Promote the successful development of the ADHS. 

c. Improve planning to enhance multi-jurisdictional coordination and efficiency. 

d. Encourage intermodal coordination. 

e. Enhance the energy efficiency of the transportation system. 

f. Develop a transportation system that enhances and preserves the Region’s environmental 

quality. 

Section 2—Guiding Principles: Strategies 

The development of regional and state strategies is guided by certain principles that should also 

be reflected in the development of particular projects implementing these strategies. These 

principles underlie ARC’s four regional development roles as advocate, knowledge builder, 

investor and partner. The Commission's guiding principles are as follows: 

1. Promote homegrown solutions. 

2. Create sustainable economic development. 

3. Address persistent economic distress. 

4. Seed innovation. 

5. Stimulate investments by federal, state, and local agencies; philanthropies; and the 

private sector. 

6. Support inclusive local decision making. 

7. Act as a clearinghouse for ideas and expertise. 

8. Capitalize on existing assets. 

9. Encourage lifelong learning. 

10. Seek regional solutions. 

11. Strengthen global competitiveness. 

The Commission described a number of regional strategies to accomplish the Strategic Plan's 

objectives. In addition, each state will annually prepare its own Strategy Statement, which may 

make use of some or all of the regional strategies or identify additional strategies tailored to the 

unique conditions of such state. The State Strategy Statements are subject to annual Commission 

approval. 

Projects of a type described among the regional and state strategies are generally understood to be 

designed to contribute to the achievement of a Commission goal. 
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The Regional Strategies for each goal area are identified below. 

Goal 1—Jobs–Strategies 

Strategic Objective 1.1: Develop Leaders and Strengthen Community Capacity 

 Support the development of broad-based leadership structures and transformative institutions 

for change, such as community-development foundations and community-development 

financial institutions. 

 Build the capacity to collaborate among government, business, and nonprofit and 

philanthropic sectors by improving skills in consensus building, communication, networking, 

knowledge and understanding of economic and social trends, and other elements of civic 

capacity. 

 Support strategic planning initiatives for local and regional organizations to capitalize on 

economic development opportunities. 

 Encourage partnerships and promote regional efforts in economic development. 

 Provide training and consultation services to local governments and nonprofit organizations 

engaged in economic development. 

Strategic Objective 1.2: Diversify the Economic Base 

 Encourage the establishment and development of workforce training programs, 

entrepreneurial support, and export activities, and the promotion of technological advances 

and technology-related businesses and services. 

 Expand efforts to modernize and strengthen existing businesses. 

 Develop new businesses that can expand the economic foundation of the Region. 

 Raise awareness about economic development tools communities can use to strengthen and 

diversify their economic base. 

Strategic Objective 1.3: Enhance Entrepreneurial Activity in the Region 

 Improve access to investment capital and credit for local businesses through resources such as 

venture capital funds, subordinated debt funds, and micro-credit lending programs. 

 Educate current and future entrepreneurs through training programs in middle schools, high 

schools, community colleges, and four-year colleges and universities. 

 Nurture local businesses by creating technical assistance networks through business 

incubators, business associations, and private-sector resources. 

Strategic Objective 1.4: Develop and Market Strategic Assets for Local Economies 
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 Identify local and regional assets for development. 

 Create strategies that help existing and new local businesses capitalize on indigenous assets. 

 Support efforts to maximize the economic benefits of Appalachian cultural and heritage 

tourism and crafts industries. 

Strategic Objective 1.5: Increase the Domestic and Global Competitiveness of the Existing 

Economic Base 

 Support research on global and domestic market opportunities. 

 Support technical assistance and ongoing business consultation to help medium and small 

businesses connect to national and international markets. 

 Support foreign direct investment in Appalachia. 

Strategic Objective 1.6: Foster the Development and Use of Innovative Technologies 

 Assist in the creation of telecommunications and computing enterprises. 

 Provide assistance for expanding existing high-technology operations in the Region. 

 Promote partnerships with, and leverage research opportunities generated by, governmentsponsored and private-sector research labs. 

 Expand and create technology research initiatives in the Region’s colleges and universities. 

 Increase support for public-sector science and technology programs. 

 Support the commercialization of new technologies developed by federal labs, universities, 

and other sources. 

Strategic Objective 1.7: Capitalize on the Economic Potential of the ADHS 

 Support local and regional economic and community-development initiatives that effectively 

use completed sections of the ADHS. 

 Encourage strategic planning to help direct and select appropriate development along future 

segments of the system. 

 Promote cooperative projects and programs between economic development officials and 

highway officials. 

Strategic Objective 1.8: Encourage Sustainable Economic Use of Natural Resources 

 Support economically sustainable uses for Appalachia’s natural and environmental assets, 

including its forests and wood products, water features and watersheds, agricultural resources 

and local food systems, and scenic viewsheds. 
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 Promote activities and initiatives that effectively use walking, cycling, and other outdoor 

recreation trails for local economic benefit. 

 Encourage research on natural resources that can make a vital contribution to sustainable 

economic growth in the Appalachian Region. 

Strategic Objective 1.9: Encourage Investments in Energy Projects that Create Jobs 

 Promote energy efficiency in Appalachia to enhance the Region’s economic competitiveness. 

 Increase the use of renewable energy resources in Appalachia, including wind, solar, 

geothermal, and biomass, to produce alternative transportation fuels, electricity, and heat. 

 Support the development of conventional energy resources in Appalachia, especially 

advanced clean coal, to produce alternative transportation fuels, electricity, and heat. 

Goal 2—People–Strategies 

Strategic Objective 2.1: Develop Leaders and Strengthen Community Capacity 

 Establish and maintain collaborative relationships between training institutions and 

businesses to improve workforce readiness. 

 Strengthen school-based civic education through service learning and youth communitydevelopment efforts. 

 Support greater involvement of young people in community activities such as tutoring, peer 

mediation, and serving on advisory boards. 

 Promote community-based dialogue and management of critical local health issues. 

 Encourage broad-based, diverse participation in leadership and community capacity building. 

Strategic Objective 2.2: Enhance Workforce Skills through Training and Education 

 Support the expansion and modernization of workforce training and education programs in 

strategic industry sectors. 

 Encourage workforce development that supports green jobs in the fields of energy efficiency 

and conservation, environmental remediation, and alternative energy development. 

 Partner with community colleges, technical schools, and universities to support strategic 

workforce development initiatives. 

Strategic Objective 2.3: Increase Access to Quality Child Care and Early Childhood Education 

 Support local and regional efforts to increase access to early childhood education programs. 

 Promote efforts that increase access to quality child care to support workforce recruitment 

and retention. 
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Strategic Objective 2.4: Increase Educational Attainment and Achievement 

 Support local and regional efforts to better prepare students, out-of-school youths, and adults 

for post-secondary-level training. 

 Maintain support for and seek expansion of the Appalachian Higher Education Network and 

other partnerships that increase college-going and college-completion rates. 

 Support dropout prevention programs. 

Strategic Objective 2.5: Expand Community-Based Wellness and Disease-Prevention Efforts 

 Use best practices in public health to develop targeted approaches to wellness and disease 

prevention. 

 Support partnerships that educate children and families about basic health risks and 

encourage lifelong healthy behaviors. 

 Enhance community efforts to improve health-delivery services, especially in communities 

facing high rates of chronic disease. 

Strategic Objective 2.6: Increase the Availability of Affordable, High-Quality Health Care 

 Expand the Region’s supply of quality health-care professionals by attracting new 

practitioners and offering training and education for members of the health-care workforce. 

 Improve facilities and infrastructure to support the provision of high-quality clinical care in 

underserved areas. 

 Use technology to reduce the high cost of health-care services. 

 Offer short-term support for sustainable clinical services among underserved populations, 

especially those in Health Professional Shortage Areas. 

 Improve access to health care for underserved populations. 

Goal 3—Infrastucture–Strategies 

Strategic Objective 3.1: Develop Leaders and Strengthen Community Capacity 

 Build the organizational capacity required to meet increasing demands related to technology, 

environmental standards, and changing revenue sources. 

 Provide training, consultation, and financial support for local leaders and organizations to 

build their capacity to address infrastructure challenges. 

 Support partnerships and regional efforts among local and state governments, nonprofit 

agencies, and citizens engaged in infrastructure development. 
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 Encourage water and sewer infrastructure development through self-help projects that use the 

skills and commitment of local communities. 

 Support strategic planning initiatives for local organizations and agencies to capitalize on 

economic development opportunities created by the Appalachian Development Highway 

System. 

Strategic Objective 3.2: Build and Enhance Basic Infrastructure 

 Make strategic investments that leverage federal, state, private, and local capital for the 

construction or improvement of basic public infrastructure that supports economic 

development or addresses a public health concern. 

 Encourage planning, design, coordination, and construction practices that improve the energy 

efficiency of infrastructure investments. 

 Support continued efforts to maintain and expand the Region’s stock of safe, affordable 

housing. 

Strategic Objective 3.3: Increase Access to and Use of Telecommunications Technology

 Make strategic investments in high-speed telecommunications infrastructure to increase local 

and regional connectivity and affordability. 

 Encourage the use of telecommunications applications in education, health care, business, 

and government initiatives. 

 Provide assistance for telecommunications development that coincides with other public 

infrastructure development. 

Strategic Objective 3.4: Preserve and Enhance Environmental Assets 

 Raise awareness of and leverage support for the reclamation and redevelopment of 

brownfields and mine-impacted communities. 

 Encourage eco-industrial development that can responsibly take advantage of the Region’s 

natural-resource assets. 

 Support regional planning and economic development that promote good stewardship of the 

Region’s natural resources. 

 Promote efforts to protect and enhance the quality of surface and ground water. 

Strategic Objective 3.5: Promote the Development of an Intermodal Transportation Network 

 Encourage the planning and development of infrastructure that enhances economic 

development opportunities presented by intermodalism. 
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 Construct access roads that link economic development opportunities to the Appalachian 

Development Highway System corridors and other transportation networks. 

Goal 4—Highways–Strategies 

Strategic Objective 4.1: Develop Leaders and Strengthen Community Capacity 

 Encourage local and multi-jurisdictional forums to strengthen communication, awareness, 

and mutual understanding in support of continued ADHS development. 

 Support collaboration and coordination between transportation and economic development 

interests to strengthen access to domestic and international markets and to maximize 

economic and employment benefits to the Region. 

Strategic Objective 4.2: Promote the Successful Development of the ADHS 

 Work with federal and state departments of transportation to identify and overcome barriers 

to the development of ADHS sections in the location-study phase. 

 Assist federal and state departments of transportation in solving design problems and moving 

ADHS sections to the construction phase. 

 Promote a development approach for the ADHS that preserves the cultural and natural 

resources of the Region while enhancing economic opportunity. 

Strategic Objective 4.3: Improve Planning to Enhance Multi-Jurisdictional Coordination and 

Efficiency 

 Promote improved coordination of technical information, funding disbursements, and 

construction scheduling to facilitate the construction of ADHS highway state-line crossings. 

 Support opportunities to expand public-private coordination to increase the availability of 

capital investments and improve the transportation capacity of the Region. 

Strategic Objective 4.4: Encourage Intermodal Coordination 

 Develop the ADHS as the foundation for a coordinated and balanced intermodal 

transportation system that maximizes the Region’s access to domestic and international 

markets. 

 Encourage the development of key regional transportation corridors (highway, rail, and 

waterway) that link intermodal inland ports with key coastal ports to strengthen domestic and 

global access and enhance the competitiveness of Appalachian businesses. 

Strategic Objective 4.5: Enhance the Energy Efficiency of the Transportation System 

 Encourage planning, design, coordination, and construction practices that improve overall 

energy efficiency in the movement of Appalachian travelers and cargo. 
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 Support the development and application of advanced transportation technologies that reduce 

energy consumption and help ensure the competitiveness of the Region’s businesses. 

Strategic Objective 4.6: Develop a Transportation System that Enhances and Preserves the 

Region’s Environmental Quality 

 Encourage planning, coordination, and cooperation to achieve a reliable, safe, and costefficient transportation system that can both contribute to the Region’s economic success and 

help protect its environmental quality. 

 Promote the use of technologies that reduce the environmental impact of moving 

Appalachia’s travelers and cargo. 
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Section 3—Matching 

In general, the Commission expects a recipient of an ARC grant to contribute its own resources to 

a project to the extent it is able to do so and to seek additional non-ARC funding assistance in a 

diligent manner. 

The Appalachian Regional Development Act imposes matching requirements on ARC grants as 

described below. In addition to these statutory match requirements, however, the individual 

Appalachian States set forth in their Annual Strategy Statements their own cost-sharing and 

matching requirements, which may be more restrictive than the statutory limits in a particular 

instance. 

3.1 ARDA Matching Requirements–General 

a. Generally, ARC grants are limited to 50% of project costs. 

 

b. For projects in ARC-designated distressed counties, this limit can be raised to 80%. 

c. For projects in ARC-designated at-risk counties, this limit can be raised to 70%. 

d. For projects located in ARC-designated competitive counties (those that are 

approaching national economic norms), funding is usually limited to 30% of project 

costs 

e. ARC funding is usually not available for projects located in ARC-designated 

attainment counties (those that have attained or exceeded national economic norms). 

3.2 ARDA Requirements–Miscellaneous 

a. LDD administrative grants may be funded at 50%, wherever the LDD is physically 

located, except that a state may request that the ARC participation be raised to as 

much as 75% for an LDD that includes a distressed county or counties within its 

service area and 70% for an LDD that includes an at-risk county or counties within 

its service area. 

b. Funding for work on the Appalachian Development Highway System is allowed at 

80%, wherever the project is located. 

c. Funding for an access road project is allowed at 80% in distressed, at-risk and 

transitional counties. Funding is limited to 30% in competitive counties and is 

prohibited in attainment counties. 

d. Similarly, loans from an ARC Revolving Loan Fund (RLF) are restricted by the limit 

applicable to the county in which the project for which the loan is requested is 

located. (This rule does not apply to loans made with ARC RLF funds approved prior 

to November 13, 1998. Loans using such funds are restricted in accordance with the 

terms of the grant agreements under which they were made available.) 
ARC PROJECT GUIDELINES 12 

e. If otherwise eligible for funding, projects involving construction assistance for 

housing under Section 207 of the ARDA (40 U.S.C. 14503) cannot exceed 10% of 

total project costs regardless of location. 

f. Health operations continuation projects under Section 202 of the ARDA (40 U.S.C. 

14502) are limited to 75% of project costs after the second year of operations, even in 

distressed counties. 

3.3 ARDA–Waiver of Restrictions on Projects in Economically Strong Counties 

The restrictions on projects in competitive and attainment counties may be waived by the 

Commission upon a showing of (1) the existence of a significant pocket of distress in the part of 

the county in which the project is carried out or (2) the existence of a significant potential benefit 

from the project in one or more areas of the region outside the designated economically strong 

county in which the project is carried out. Waiver requests are made by the State Alternate 

representing the potential grantee, and such requests must be approved by the Federal CoChairman and State Alternates. 

3.4 Multi-County Projects 

Special matching rules apply to projects that are carried out in more than one county. 

a. If there is a distressed county in a project: 

1. and at least half the counties are distressed, the project may be funded at up to 

80% of project costs; 

2. and at least half the counties are in some combination of distressed and at-risk, 

ARC assistance can be the higher of 70% of project costs or the average 

percentage applicable to the various counties in the project; and 

3. but fewer than half the counties are distressed, ARC assistance can be the higher 

of 50% of project costs or the average percentage applicable to the various 

counties in the project. 

b. If there is no competitive county or attainment county in a project, and at least half 

the counties are at-risk, the project may be funded at up to 70% of project costs. 

c. All other projects shall be funded at the average percentage applicable to the various 

counties in the project; except that the portion of a project, which is attributable to an 

attainment county in a project not including a distressed county, shall be considered 

ineligible for ARC assistance and may not be considered for matching purposes. 

3.5 Discretionary Grant Authority 

A limited amount of discretionary authority is made available to the Commission under Section 

302 of the ARDA (40 U.S.C. 14321). Annually, the Commission allocates this authority to the 

Co-Chairmen’s Committee and among the Appalachian States. The authority can be used to raise 

the statutory limits on ARC funding in projects implementing special regional initiatives 

approved by the Commission. It can also be used, with the approval of the Co-Chairmen’s 

Committee, in instances of emergency economic distress. The discretionary authority, however, 
ARC PROJECT GUIDELINES 13 

cannot be used to eliminate the funding restrictions on projects in competitive and attainment 

counties. 

Section 4—Miscellaneous Requirements 

4.1 The ARC Code (Section 8-4) also specifically restricts the use of ARC funds for: 

1. any form of assistance to a relocating industry or business (Section 224(b) of ARDA); 

2. recruitment activities that place a state in competition with another state or states; and 

3. projects that promote unfair competition between businesses within the same immediate 

service area. 

4.2 The Code (Section 8-1 b) allows an ARC grant involving significant construction to be 

directly administered by the Commission only if the project will be managed by a Federal or State 

entity experienced in the management of federally funded construction projects. 

4.3 The same Code section also prohibits grants made directly to a for-profit entity. 

4.4 Generally, assistance for an operations project is not available beyond three years after the 

effective date, except that a state may request additional funding for such a project pursuant to 

Section 303 of the ARDA (40 U.S.C. 14322). 

4.5 Commission approval of a project for construction, renovation or equipment must take place 

prior to the letting of any contract. Except for a project under Section 201 of the ARDA (40 

U.S.C. 14501) or as otherwise prohibited by law, a State may waive this requirement at its option 

upon a finding that conditions warrant such action. A State that waives this requirement shall 

immediately notify ARC of such waiver. 

4.6 At the request of a state, the Commission may revoke or revise its approval of any project 

pursuant to Section 303 of the ARDA (40 U.S.C. 14322) (excluding projects under Section 201 

(40 U.S.C. 14501)) if the work intended to be assisted is not under way within 18 months after 

the date of approval of such project. 

Section 5—Project Applications 

To assist the Commission with the project evaluations required by the ARDA and the Code, all 

applications for ARC assistance should provide the following information and explanations: 

1. Identification and description of grantee. 

2. Identification and description of the area to be served by the project. 

3. A brief statement of the objective of the project and an explanation of its relationship to 

one or more of the Commission’s Strategic Goals. 

4. A description of the project rationale, including a description of the needs and specific 

problems to be addressed by the project and a demonstration of the need for ARC 

financial assistance, including reasonable assurances that the project makes use of all 

available federal and non-federal funds. An application for an ARC-assisted construction 
ARC PROJECT GUIDELINES 14 

project should include a discussion of any efforts that may have been made to improve 

the energy efficiency of the project. 

5. A detailed description of the work to be undertaken with grant and matching funds with 

pertinent budget information. Matching funds should be identified by amount and source 

with evidence of assurance that such funds are available. The application shall also 

provide reasonable assurance that there is management capability to carry out the project 

effectively. 

6. A description of the output and outcome benefits to be derived from the project with 

particular emphasis on the extent to which the benefits to the area being served by the 

project will be realized on a continuing rather than a temporary basis. Benchmarks and 

performance measures shall be identified for each ARC-assisted project using the 

following definitions: 

a. Output measures are indicators that count the goods and services produced by an 

individual or agency. 

b. Efficiency measures are indicators that measure the unit cost associated with a given 

output. 

c. Outcome measures are indicators that measure the actual impact of public benefit of 

the actions of an individual or agency. 

Section 6—Local Access Roads 

6.1 Authority 

ARDA. The construction of local access roads in the Appalachian Region is authorized under 

Section 201 of the Appalachian Regional Development Act of 1965, as amended (ARDA) (40 

U.S.C. 14501). The ARDA authorizes the construction of up to 1,400 miles of local access roads 

that will serve recreational, residential, educational, commercial, or industrial sites, or facilitate a 

school consolidation program. ARDA Section 201 access road projects must be approved by the 

Commission, the State Department of Transportation and the Federal Highway Administration. 

Projects are usually administered by the State Department of Transportation. 

SAFETEA-LU. Funds authorized for the Appalachian Development Highway System (ADHS) 

program under Section 1101 of the Safe, Accountable, Flexible, Efficient Transportation Equity 

Act: A Legacy For Users may be used to construct Appalachian access roads (SAFETEA-LU, 

Public Law 109-59, Section 1116). 

Section 214. A State may also use a portion of its ARC Area Development allocation to fund an 

access road project under Section 214 of the ARDA (40 U.S.C. 14507). Such a project must be 

authorized under another Federal grant program and will be administered by the basic Federal 

agency (HUD, EDA or Agriculture) having responsibility for such grant program. Project criteria 

and matching limits for ARC Section 214 projects are discussed in the ARC Project Guidelines. 

6.2 Funding and Match. 

The ARC Code allows Appalachian States to apply a portion of their ADHS funds to access road 

projects (Section 9.5.c). Annually, each State may use $500,000 plus an additional 5% of its 
ARC PROJECT GUIDELINES 15 

ADHS allocation for access road projects, provided the total amount does not exceed $1 million. 

Access road authority is not cumulative, but must be approved by ARC during the year of 

availability. 

The maximum Federal participation in an Appalachian access road project is 80% in ARC 

Distressed and Transitional counties. Funding is limited to 30% of project costs in ARC 

Competitive counties and is prohibited in ARC Attainment counties. 

6.3 Standards. 

Section 201 of the ARDA requires Appalachian access road projects to be designed, constructed 

and maintained in accordance with the provisions of Title 23 of the U.S. Code. Section 109 of 

Title 23 allows road projects, such as access roads, that are not on the National Highway System, 

to be designed and constructed in accordance with State standards. ARC access roads are to be 

designed to accommodate the types and volumes of traffic that are anticipated for the 20-year 

period following construction. 

6.4 Specific Project Criteria. 

Section 9.6.b of the ARC Code provides criteria for specific types of ARC access roads: 

Industrial, Commercial and Service Areas. Projects serving such areas must provide 

significant employment opportunities or otherwise meet the criteria set forth in an approved State 

Strategy Statement. A program for stimulating development in the area served by the project must 

be in existence, or specifically planned and funded. Such programs shall make provisions for 

necessary utilities, and shall be compatible with other development plans for the area. 

Residential Developments. Projects may be approved to provide access to sites required to 

satisfy demonstrated needs for permanent housing. 

Recreation Areas. Projects serving a recreational development must have a significant impact on 

the local economy. A program for stimulating development in the area served by the project must 

be in existence, or specifically planned and funded. 

Educational Areas. Projects serving school consolidations or other educational activities shall be 

designed, wherever possible, to serve additional developmental objectives. 

Timber Areas. Projects may be approved to facilitate the harvesting of timber lands which have 

significant commercial value. Priority shall be given to projects that complement other developmental activities serving the same areas. 

6.5 Eligible Activities. 

ARC local access road projects may provide funding for preliminary engineering, purchase of 

rights-of-way and construction. ARC funds are available for initial construction of local access 

roads but not for resurfacing, rehabilitation, upgrading or safety improvements on previously 

constructed ARC access roads. Eligibility of specific costs items are governed by the appropriate 

Federal-aid and State regulations for engineering, right-of-way and construction, including 

regulations pertaining to utility adjustments and accommodation. 
ARC PROJECT GUIDELINES 16 

6.6 Project Applications. 

In addition to the information required by Section 5 of the ARC Project Guidelines, local access 

road project applications must include a certification by the State Department of Transportation 

that the project has been, or will be, included in the statewide transportation improvement 

program (STIP), that it meets state design criteria and that funds and obligation authority 

necessary for the project will be made available from the State’s ADHS account for the project. 

The application should also include a description of the project including the roadway typical 

section(s), length to the nearest hundredth of a mile, pavement structure, and applicable design 

criteria, as well as a schedule for the completion of important project components. 

Section 7—Regional Skills Partnerships 

7.1 ARDA Authority 

Section 205. Assistance to regional skills partnerships in the Appalachian Region in order to 

improve the job skills of Appalachian workers for a specified industry is authorized by Section 

205 of the Appalachian Regional Development Act of 1965, as amended (ARDA) (40 U.S.C. 

14506). Section 205 grants are made and administered directly by the Commission. Section 205 

contains eligibility criteria for grantees and projects that are summarized in these guidelines. 

Other Authorities for ARC Job-Training and Skills Development Projects. A State may also 

use a portion of its ARC Area Development allocation to fund job-training and skills 

development projects under Sections 214 and 302 of the ARDA. (40 U.S.C. 14507 and 14321) 

A project under Section 214 must be authorized under another Federal grant program and will be 

administered by the basic Federal agency having responsibility for such grant program. The Carl 

D. Perkins Vocational and Technical Education Act of 1998, administered by the Department of 

Education, is mentioned specifically in Section 214, but other Federal grant programs for such 

assistance may also be available for ARC project funding. Project criteria and matching limits for 

ARC Section 214 projects are discussed elsewhere in these Guidelines. 

Grants for such projects under Section 302 are made and administered directly by the 

Commission and are not subject to the eligibility restrictions of Section 205 grants 

7.2 Eligible Entities. 

Section 205 funding is available only to a consortium established to serve one or more industries 

in a specified geographic area of the Region, which consists of representatives of businesses or a 

nonprofit organization that represents businesses, labor organizations, State and local 

governments, or educational institutions. 

7.3 Eligible Activities. 

In general, Section 205 funding is available for any project that is intended to improve the job 

skills of workers for a specified industry in a specified geographic area of Appalachia. The 

ARDA includes as eligible for funding under Section 205 the following types of projects; other 

types of projects, however, that meet the general eligibility criteria may also be considered for 

funding: (1) assessments of training and job skill needs for an industry; (2) development of 

curricula and training methods, including electronic learning or technology-based training; (3) 
ARC PROJECT GUIDELINES 17 

identification of training providers and the development of partnerships between the industry and 

educational institutions, including community colleges; (4) development of apprenticeship 

programs; (5) development of training programs for workers, including dislocated workers; and 

(6) development of training plans for businesses. 

7.4 Restriction on Administrative Costs. 

A grantee consortium under a Section 205 grant may not use more than 10% of the grant funds to 

pay the administrative costs associated with its project. Administrative costs, however, may be 

used to supply the grantee’s cost share obligations for its grant. 

7.5 Project Applications. 

In addition to the information required by Section 5 of the ARC Project Guidelines, regional 

skills partnership project applications must include a description of the consortium that is 

applying for the grant indicating the geographic area and the industry or industries it serves along 

with a listing of its members and their business or organizational affiliations. The project 

application must also indicate the specific industry for which it is designed to improve workers 

skills. Evaluation measures keyed to jobs created or preserved by the project must be included. 
ARC PROJECT GUIDELINES–APPENDIX A 18 

Appendix A—Policy Statements 

Policy for the Development of the Travel and Tourism Industry 

The Appalachian Regional Commission (ARC) recognizes the development of the travel and 

tourism industry as an important component of the Commission’s strategy to improve the 

economic health of the Appalachian Region. 

ARC will support activities as they relate to the travel and tourism industry in the context of an 

overall development strategy - such as: 

1. Planning and research 

2. Training and technical assistance 

3. Education and capacity building 

4. Marketing and promotional efforts 

Infrastructure projects related to the travel and tourism industry will be reviewed using the same 

criteria as that used for all other economic development projects. Proposals to use ARC funds for 

capital investments in this sector, including construction and acquisition, are not prohibited but 

will be reviewed stringently. In particular, such projects must be an integral part of a strategic 

plan for the community and/or region and must meet the highest standards of a cost-benefit 

analysis as to economic outcomes. 

All local and regional proposals for travel- and tourism-related funds should be discussed with the 

States at the earliest possible state of development. 

Policy for the Use of ARC Export Funds for Trade Events 

ARC funds may not be used to support travel for persons acting in the capacity of private 

business people. 

ARC funds may be used for trade events overseas as noted below: 

1. Travel support for one public sector representative per ARC state 

2. Translation of materials to be used at the event and general translation services at the 

event 

3. Shipping materials to the event 

4. Exhibit space and registration fees for the event for private businesses 

5. Incidental services for the event 

ARC funds should be used for value-added export promotion projects within the Appalachian 

portion of each state and should not be used to replace state funds in on-going state projects or 

programs. ARC-funded activities should be part of a comprehensive marketing effort. 

Policy for Residential Infrastructure Projects 

The Commission will provide grants for basic residential infrastructure projects only for 

communities in ARC designated distressed counties except that such assistance may be provided 

in a transitional county upon a special showing of compelling need such as the location of the 

project in a distressed area of the county or as disaster relief or to address a mandate of the 
ARC PROJECT GUIDELINES–APPENDIX A 19 

Federal EPA or a state health or environmental agency. Self-help projects for basic residential 

infrastructure may also be funded in transitional counties. 
ARC PROJECT GUIDELINES–APPENDIX B 20 

Appendix B—Regional Initiative Guidelines 

General Provisions 

Implementation of the four regional initiatives in leadership and civic development, export 

development, telecommunications, and entrepreneurship marks a new path for Federal-State 

collaboration at the Commission. The Commission has established a regional goal for each of the 

initiatives, and the States have developed their own strategies for achieving these goals. The 

States shall have maximum flexibility in crafting projects that address the initiatives in a 

meaningful and systemic fashion. To assure that the goals of the initiatives are met, the 

Commission shall assess the progress of the States' efforts. 

Specific guidelines for each of these regional initiatives follow these general provisions. 

Program Review and Evaluation. The Commission staff, with the cooperation and assistance of 

the States, has inventoried relevant past, ongoing, and nascent program efforts in each State. The 

reviews provided a programmatic baseline from which each State developed objectives for each 

of the initiatives and strategies for accomplishing them. Each Governor submitted to the 

Commission a statement (Strategy Statement) outlining the State’s objectives and strategies. 

The Executive Director continues to work with the States to ensure that their objectives and 

implementation strategies are supportive of the Commission’s goals, and he shall use the 

Governors' Strategy Statements to establish benchmarks for measuring progress in the future. The 

Governors shall review their Strategy Statements on an annual basis and amend them as 

necessary. 

The Commission staff, with the assistance of the States, shall prepare an annual report that gauges 

the progress made in each of the initiatives. The report will be presented at the Governors' 

Quorum meeting, and this annual review will also be an opportunity to showcase best practices 

and highlight successful model projects. 

Project Review. A state shall include with each project submission a statement explaining how 

the proposed project implements the State’s strategy, achieves the State’s objectives, and 

advances the regional goals. The Commission shall use these three criteria as the primary basis 

for evaluating projects. 

States may submit projects for any of the regional initiatives. States should document activities 

for the regional initiatives funded by other sources. 

Project Application Requirements. 

1. Eligible Applicants: Community-based organizations, public and private non-profit 

organizations, educational institutions, Local Development Districts (LDDs), local and 

state governments. Funding may not be used for sectarian purposes. 

2. Service Area: An applicant organization must either be located in Appalachia, or limit its 

proposal exclusively to the Appalachian Region. Appalachia is defined by the 

Appalachian Regional Development Act of 1965, as amended to include certain counties 

in Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, 

Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and all of West Virginia. 
ARC PROJECT GUIDELINES–APPENDIX B 21 

3. Proposals shall be developed in concert with directions from the ARC Alternate of the 

Appalachian State in which the project is located. In the case of a multistate proposal, the 

affected States shall decide among themselves which State will have the primary 

responsibility for submission of the proposal and general program administration. 

Multistate proposals must contain Governor’s letters of endorsement from all States 

involved in the project. 

4. Interested organizations must submit an original and two copies (one copy to be retained 

by the state) of the proposal to the State Alternate for review. 

5. Proposals submitted under this initiative must include: 

a. an explanation of how the project conforms to the State’s strategy for implementing 

the regional initiative, how it would further the objectives of the State and advances 

the regional goals; 

b. a description of the relationship of the proposed project to other relevant efforts of 

organizations operating in the same service area; 

c. letters of support from each agency or organization participating in program 

implementation and affirming its financial commitment in services and/or cash; 

d. an explanation of how the proposed project would fill a void in current services or 

needed programs; and 

e. definition of the benchmarks to be used in evaluating the outcomes of the proposed 

project. 

Area Development Transfers. A State may transfer funds from its area development or 

distressed counties allocations to supplement other distributions it receives for regional initiative 

projects. Funds so transferred will be subject to the requirements applicable to the regional 

initiatives. Funds transferred from a distressed counties allocation must be applied to projects in, 

or serving, an ARC designated distressed county or counties. 

Energy Efficiency Construction. Amounts available in a State’s Regional Initiative allocation 

may be applied to any ARC-assisted construction project to support elements of the project that 

improve its energy efficiency. 
ARC PROJECT GUIDELINES–APPENDIX B 22 

Leadership and Civic Development Project Guidelines 

Each member State of the Commission may have additional guidelines and criteria that applicants 

must address. All applicants are advised to work closely with their State ARC office in the 

development of proposals. 

Background and Goals. Across rural America, examples may be found of small but growing 

communities that are overcoming the obstacles of isolation, scarce resources, and the many other 

challenges to economic and social development that face nonmetropolitan areas. In nearly every 

case, the impetus behind these successful communities is an informed and involved public. For 

communities such as Tupelo, Mississippi, and Ivanhoe, Virginia, an appreciation of the 

importance of everyone working together, from the grass roots to the highest public- and privatesector leaders, to accomplish community goals, has been critical in achieving sustainable growth. 

While no two communities follow identical development paths, the successful ones clearly 

demonstrate the value of teamwork to deal with their local problems. Critical to a community’s 

ability to do this are widespread and effective leadership, broad-based community-based 

organizations (CBOS), and productive collaboration between CBOS and public- and privatesector leaders. 

Therefore, the ARC has established as a regional goal: 

The people of Appalachia will have the leadership and organizational 

capacity to work together for their economic and community development. 

To achieve this goal, the Commission is undertaking a regional initiative on leadership and civic 

development. The Commission intends to focus assistance on improving the ability of 

Appalachian communities to learn from examples of civic commitment, and giving them the 

opportunity to devise their own ways of raising their capacity to work cooperatively to address 

local concerns. 

Eligible Activities. Eligible activities include leadership and organizational development and 

training, technical assistance, start-up operational expenses, small-scale community development 

projects, and resource development and coordination activities. Specific examples include, but are 

not limited to, the following: 

 Scholarships for enrollment in leadership and organizational development programs, 

including tuition, necessary supplies, materials, and travel. 

 Customized technical assistance for leadership or organizational training, especially 

for applicants that have participated in recognized leadership and organizational 

training programs. 

 Efforts by intermediaries to develop and support grassroots and self-help 

organizations. 

 Small-scale community development projects that: 

a. develop leadership; 

b. encourage the formation of community-based groups; 

c. utilize self-help approaches; 

d. foster collaboration between community-based groups, which had previously 

acted independently; and/or 
ARC PROJECT GUIDELINES–APPENDIX B 23 

e. foster collaboration between community-based groups and local public- and 

private-sector leaders. 

 Assistance for resource development and coordination activities to share best 

practices, enhance grant-writing skills, and/or improve networking between local 

groups in the community and other community development assistance 

organizations. 

 Development of a leadership, facilitation, or collaboration training program, 

preferably by a private nonprofit group, where there is an identified lack of such a 

program. 

 Community-wide strategic planning activities modeled on the Initiative on 

Empowerment Zones and Enterprise Communities or other successful processes, 

which are based on inclusion, collaboration, and a recognition of common goals. 
ARC PROJECT GUIDELINES–APPENDIX B 24 

Internationalization of the Appalachian Economy Project Guidelines 

Each member State of the Commission may have additional guidelines and criteria that applicants 

must address. All applicants are advised to work closely with their state ARC office in the 

development of proposals. 

Background and Goals. One of the key strategies for the economic development of Appalachia 

is to stimulate export activity of the Region's small and medium-sized enterprises (SMEs). 

Significant benefits to the Region may be gained by increasing the number of firms involved in 

export trade, the number of jobs associated with export trade, and the amount of international 

sales of manufactured goods and services. 

Therefore, the ARC has established as a regional goal: 

Small and medium-sized businesses throughout Appalachia will have the 

commitment and capability to participate in the global market. 

To achieve this goal, the ARC is undertaking a regional initiative to promote the 

internationalization of the Appalachian economy. The Commission intends to assist the expansion 

of appropriate export services and activity in the Appalachian areas of the 13 Appalachian states, 

to encourage states to develop strategic trade development plans, to utilize new technologies that 

facilitate export activity of SMEs, and to encourage public-private initiatives to provide the most 

cost-effective and efficient delivery of programs. 

Eligible Activities. Eligible activities include those pertaining to data development, finance, 

technical assistance, training, and marketing. Activities should focus on increasing the number of 

firms exporting, expanding the number of jobs attributable to exporting, and increasing export 

sales. 

Specific examples include, but are not limited to the following: 

 Development and implementation of strategic plans to encourage export trade. 

 Demonstrations of new ways of delivering export assistance services. 

 Creating networks of private and public service providers to deliver more efficiently 

training, technical assistance, and other trade services. 

 Building awareness of export potential in rural business communities. 

 Identification of foreign markets for Appalachian SMEs and development of services 

or technical assistance to benefit from new market opportunities. 

 Demonstrations of new technologies that meet the needs of new-to-exporting, exportready and potential exporters. 

 Provision of startup funding to an organization that provides direct technical 

assistance or other services to area industries where none exists. 
ARC PROJECT GUIDELINES–APPENDIX B 25 

Telecommunications and Technology Guidelines 

Each member State of the Commission may have additional guidelines and criteria that applicants 

must address. All applicants are advised to work closely with their State ARC office in the 

development of proposals. 

Background and Goal. 

In November 2001, the Appalachian Regional Commission adopted the ARC 

Telecommunications Strategic Initiative: Information Age Appalachia Program, which contained 

guidelines for project activities supported by the Initiative. The ARC Program was predicated on 

a Regional Vision that: 

Appalachia is a prosperous and vibrant region with full access to the tools of the 

Information Age and has the knowledge and capacity to use those tools to compete 

successfully in the 21st Century economy.

In March 2002, Congress added this Initiative, essentially as adopted by the Commission, to the 

Appalachian Regional Development Act (ARDA) as Section 203 and authorized additional 

appropriations to carry out the Initiative in the amount of $23 million through fiscal year 2006. 

In approving the Initiative, Congress noted that, while much of the Nation is experiencing the 

benefits of access to technology and telecommunications, Appalachia has extremely limited 

access to these assets. Accordingly, Congress added Section 203 to the ARDA in order to 

provide funds and technical assistance to increase affordable access to advanced 

telecommunications services, provide education and training, assist industry groups and 

businesses in preparing to utilize technology, and support entrepreneurial opportunities in these 

areas in the Region. 

These Guidelines incorporate the background discussions and guiding principles contained in the 

Information Age Appalachia Program approved by the Commission in 2001. 

Eligible Activities. These Guidelines provide general provisions and eligibility requirements for 

the telecommunications and technology grant program. In general, ARC Telecommunications 

and Technology projects should address serious gaps found in access to a modern 

telecommunications and technology infrastructure, especially in distressed areas of the 

Appalachian region. Program activities feature both region-wide and local initiatives and are 

based on four broad strategies adopted by the Commission and included by Congress in the 

approved Initiative. Multi-use strategies are highly recommended. Each activity allows 

maximum flexibility for the states to determine the best approach to delivering modern 

telecommunication systems and other technological improvements to business, education, health, 

and citizen groups. 
ARC PROJECT GUIDELINES–APPENDIX B 26 

(1) Access: Increase affordable access to advanced telecommunications, entrepreneurship, 

and management technologies or applications in the region: 

Eligible activities include, but are not limited to the following: development of local 

community strategic telecommunications plans including assessment of local 

infrastructure and demand; assistance with the aggregation of local demand to make 

private sector investments economically feasible; the establishment of eligible 

entities that encourage donated networking hardware, software and other services to 

facilitate connectivity to rural communities in the region; and facilitation of enhanced 

Internet or other telecommunications services to hard-to-reach communities (referred 

to as last mile assistance). 

(2) Education: Provide education and training in the use of telecommunications and 

technology. 

In addition to access, the people of Appalachia must have the appropriate awareness, 

knowledge and training to fully understand and utilize the benefits of information 

technology for themselves and their children. Program activities include, but are not 

limited to the following: 

 Upgrade the skills of teachers, create training opportunities for local leaders 

including the staffs of Local Development Districts (LDD), Industrial 

Development Authorities (IDA), and Small Business Development Centers 

(SBDC) and other business organizations; increase the level of Universal 

Service funds in distressed counties and areas and multi-county areas; 

develop comprehensive technology plans; and planning initiatives related to 

adult education and job-related technology training; distance learning (K-12 

and adult) that may include traditional technologies as well as cable TV, 

wireless and other technologies to enhance training opportunities; and 

develop Community Tele-centers that create community access points 

available to welfare-to-work programs, adult-oriented activities, and existing 

state initiatives. 

(3) E-Commerce: Develop programs to increase the readiness of industry groups and 

businesses in the region to engage in electronic commerce.

To remain competitive, Appalachia’s businesses must maximize their use of the 

Internet and electronic commerce. For example, existing and new businesses need 

training in how to bring the Internet into their daily work environment, how to design 

strategies for marketing products over the web, and how to design plans for meeting 

production and shipping requirements in an Internet economy. The Initiative focuses 

on e-commerce readiness training for small and medium-sized enterprises to promote 

Internet-enabled business techniques. Program activities include, but are not limited 

to the following: 

 

 Developing an inventory and assessment of the current level of 

telecommunications access and use within either a geographic region or 

industry sector; increasing the opportunity for small- and medium-sized 

enterprises to engage in e-commerce by seeking discounts on software and 

hardware necessary to launch an e-commerce business; building on the 
ARC PROJECT GUIDELINES–APPENDIX B 27 

region’s sectoral strengths to ensure that e-commerce activities assist 

Appalachian businesses to connect with manufacturers, suppliers, buyers, 

and customers; promoting e-commerce readiness training to small and 

medium-sized enterprises to stimulate adoption of Internet-enabled business 

techniques. 

(4) Entrepreneurship: Support entrepreneurial opportunities for businesses in the 

information technology sector. 

Strategies for implementing this activity include supplying the region with enhanced 

telecommunications equipment, assisting with strategic planning for Information 

Technology (IT) business development through SBDCs and IDAs, fostering 

indigenous software and network design companies, developing IT incubators and 

“Smart Parks” for new businesses that provide a modern telecommunications 

environment that is critical to new businesses in the region; collaborating with 

organizations such as the Small Business Administration (SBA), the National 

Business Incubator Association (NBIA), state and regional organizations that use 

enhanced telecommunications services to support the growth of small and mediumsized businesses; and supporting small and startup enterprises through access to 

developmental venture capital and credit, managerial and technical assistance and 

training. 

Strategy Statement. Each Appalachian State has submitted to the Commission a strategy for the 

Telecommunications Regional Initiative describing the State’s proposed program in 

telecommunications development, including objectives and strategies. Regional initiative 

strategies are reconsidered and revised or renewed each year in the State’s Annual Strategy 

Statement. Future State Development plans should also reflect the importance of the Initiative to 

overall State Appalachian Planning. States may have additional guidelines and criteria that 

applicants must address. All applicants are advised to work closely with their State ARC office in 

the development of proposals. 

In developing strategies for the regional initiative, states are encouraged to obtain input from 

policy makers, state and local officials, community leaders, and telecommunications and 

technology development practitioners from both the public and private sectors. 

The Commission staff, with assistance from the States, shall determine performance measures for 

the initiative consistent with procedures set by the Commission for other regional initiatives and 

the five goals of the Strategic Plan. 
ARC PROJECT GUIDELINES–APPENDIX B 28 

Building Entrepreneurial Economies Project Guidelines 

Each member State of the Commission may have additional guidelines and criteria that applicants 

must address. All applicants are advised to work closely with their State ARC office in the 

development of proposals. 

Background and Goal. The Appalachian Entrepreneurship Initiative, established by the 

Appalachian Regional Commission in 1997, was recognized by Congress and included among the 

ARC statutory programs in the Appalachian Regional Development Amendments of 2002 as 

Section 204 of the Appalachian Regional Development. Act. In establishing the Initiative, the 

Commission adopted a regional goal on entrepreneurship and delineated programmatic areas for 

eligible funding, which have now been further refined by Congress, as described in these 

Guidelines. Each Appalachian state has adopted its own strategies to implement the Initiative 

with specific objectives that provide the basis for reviewing the merits of proposed projects. 

The ARC has established as a regional goal: 

Appalachian communities will have the commitment and resources to 

assist entrepreneurs in starting and expanding local business, thus 

creating jobs, increasing local wealth, and strengthening local economies. 

Eligible Activities. Proposals for funding under the Entrepreneurship Initiative must be 

supported by a demonstration that they will contribute to the achievement of the regional 

initiative goal. The General Provisions for ARC Regional Initiatives will apply to the 

Appalachian Entrepreneurship Initiative. Business establishments that are not locally owned and 

are part of a larger non-locally based organization, i.e. branch plants, are ineligible for assistance 

under this initiative. 

In general, eligible activities implementing the Initiative should build awareness of, and advocate, 

creating entrepreneurial economies with communities and policy makers at the state and/or local 

level and promote the integration of the elements of an entrepreneurial system at the state or 

regional level. 

Specific project proposals should address gaps in any or all of the four key elements of an 

entrepreneurial economy identified in Appalachian Regional Development Act Amendments of 

2002: entrepreneurial training and education; access to debt and equity capital; sector 

development strategies; and business incubator networks, as described below. 

1. Entrepreneurial Training and Education—to support the advancement of, and 

provide, entrepreneurial training and education for youths, students, and 

businesspersons. Education and training institutions play a key role in stimulating 

entrepreneurship through the introduction of entrepreneurial content into the curriculum 

of primary and secondary school courses. At the secondary education level, nonprofit 

organizations, as well as business and trade groups, can help start and assist in developing 

alternative educational venues, including mentoring programs. In addition, conducting 

hands-on activities that expose students to entrepreneurial environments permit them to 

explore the tasks and challenges of enterprise development. Postsecondary educational 

institutions also play an important role as colleges and universities can offer more 

advanced educational and training courses providing managerial and technical assistance 

and information to entrepreneurs and those who wish to start businesses. 
ARC PROJECT GUIDELINES–APPENDIX B 29 

2. Access to Debt and Equity Capital—to improve access to debt and equity capital by 

such means as facilitating the establishment of development venture capital funds. 

Finding the initial start-up capital for a new business is often the most daunting hurdle for 

an entrepreneur to clear, particularly equity capitalization, but other hurdles rapidly 

confront the new business, including finding adequate working capital and credit for 

building up inventories. Other financing problems include finding seed capital for new 

technological innovation, loan packaging assistance and long-term debt financing for 

newer companies or businesses that are seeking to expand. A wide range of private and 

public institutions play a role in servicing these financial needs, but the role of 

development finance institutions is particularly important for rural regions like 

Appalachia, as these organizations often provide both finance and technical assistance to 

new and expanding small businesses. 

3. Sector Development Strategies—to aid communities in identifying, developing, and 

implementing development strategies for various sectors of the economy. Specific 

regions of the United States have enjoyed enormous economic success by identifying and 

employing their distinctive competitive advantages in the market place. There are a 

number of factors that can contribute to such successes, including access to well-educated 

employees, proximity to customers, partnerships with research institutions, presence of 

financial systems that understand the specific needs of an industry, access to ports and 

other export services, as well as collaboration among area firms. By identifying strengths 

and weaknesses in the Appalachian Region, especially in the Region's most economically 

distressed counties and areas, communities can take an important step in realizing their 

economic potential. Private-sector participation and leadership are key ingredients in the 

success of this approach. 

4. Business Incubator Networks—to develop a working network of business incubators 

and to support entities that provide business incubator services. Formal and informal 

networks of professional and trade service providers link entrepreneurs and firms to 

various business, technical, educational, training and information services. Such service 

provider networks can realize synergies in providing a one-stop shop for their customers, 

even though all the providers may not be under one roof. An entrepreneurial business 

incubator network can coordinate the provision of services to customers and supply 

specific resources including legal services and protection of intellectual property services 

in support of the acquisition and use of advanced technology and consultation on 

strategic planning, marketing and advertising. Moreover, collaboration among service 

providers often generates unique information resources for participants and can stimulate 

new types of innovations in services and new market opportunities. 

The Commission also recognizes two other areas of concern for entrepreneurial development that 

cross cut these key elements and may be important components of ARC entrepreneurship 

projects: 

Technical and Managerial Assistance—For a majority of entrepreneurs, the key to 

launching a business, as well as surviving and thriving past the first year, is the 

availability of technical, managerial, and financial expertise. Such business management 

expertise is essential for enterprise development, from early stage activities, including 

market feasibility studies, business planning, financial planning and packaging, to ongoing marketing, accounting, procurement advice, export assistance, and management 

and legal capability. Such services, as well as other more specialized assistance, are 

available from a wide range of private- and public-sector providers, including business 
ARC PROJECT GUIDELINES–APPENDIX B 30 

consultants, business incubators, colleges and universities, financial institutions, small 

business development centers, and economic development agencies. However, anecdotal 

evidence suggests that the availability of these services range from fragmented at best to 

nearly unavailable. 

Technology Transfer—Technological innovation by new and existing businesses often 

lies at the heart of enterprise development and brings with it a host of problems that may 

confound success unless they can be solved in an efficient and timely manner. The 

technological assistance required by businesses includes a wide range of services, such as 

engineering services for product development and manufacturing process design; 

technology transfer programs to promote commercialization of technologies from 

universities, public laboratories, or large firms; innovation seed grants; research and 

development financing; patent and licensing assistance; and technology-based incubators. 

This assistance is very fragmented throughout the Region and highly geographically 

concentrated. 

Strategy Statement. Each Appalachian State has submitted to the Commission a strategy for the 

Entrepreneurship Regional Initiative describing the State’s proposed program in entrepreneurial 

development, including objectives and strategies. Regional initiative strategies are reconsidered 

and revised or renewed each year in the State’s Annual Strategy Statement. Future State 

Development plans should also reflect the importance of the Initiative to overall State 

Appalachian Planning. States may have additional guidelines and criteria that applicants must 

address. All applicants are advised to work closely with their State ARC office in the 

development of proposals. 

In developing strategies for the regional initiative states are encouraged to obtain input from and 

participation of policy makers, state and local officials, appropriate private sector representatives, 

community leaders, and development practitioners. 

The Commission staff, with assistance from the States, shall determine performance measures for 

the initiative consistent with procedures set by the Commission for the first three regional 

initiatives and the five goals of the Strategic Plan. 
ARC PROJECT GUIDELINES–APPENDIX B 31 

Asset Based Development Guidelines 

 

Identifying the strengths found in Appalachia, and leveraging these strengths into economic 

opportunity, is one way to increase revenue and create jobs. To focus the attention of the 

Region’s public, private, and non-profit leaders on Asset Based Development strategies, and to 

increase the chances of the success of these activities, ARC will undertake a broad scope of work 

to identify best practice, forge linkages with institutional partners, provide technical assistance to 

communities, and finance asset based development efforts. ARC will support projects that 

demonstrate potential for generating new revenue streams and creating jobs for Appalachian 

communities. 

 

Asset based economic development is one of several possible strategies for achieving the 

Commission’s Strategic Goals and for addressing the economic restructuring taking place across 

the Region. It is a strategy that complements other economic development strategies being 

employed throughout the Region. Asset based development can be defined as a strategy that 

builds on existing resources—natural, cultural, structural and leadership—to create valued 

products and services that can be sustained for local benefit. This strategy involves developing 

the Region’s assets and identifying new and creative uses for perceived liabilities in order to 

generate revenue and create jobs. Communities can inventory cultural, natural, structural and 

leadership/community resources and develop strategies that utilize strengths and transform 

liabilities. The key is to identify the potential within a community and maximize its impact, 

developing new revenue streams by turning perceived liabilities into strengths, or developing 

untapped natural and cultural resources into desired products and services. 

Asset based development focuses on enhancing the assets in the region. Successful strategies not 

only have positive economic impacts, like new jobs and businesses, but strengthen the assets 

themselves – be they forests, rivers, downtowns or renovated Brownfield facilities—to ensure 

sustained, long term impact in a community. Asset based economic development is not a quick 

fix or a panacea for the Region. However, it can be part of a comprehensive solution for 

sustainable community and economic development. 

Some examples of successful Asset Based Development include: 

Aquaculture. In 1999 the Mingo County Redevelopment Authority built a fish hatchery 

for the salmon-like Artic Char, using water from an abandoned section of the Mingo 

Logan Coal Mine in a distressed county. The mining companies donated $150,000 of 

in-kind contributions, matched by funds from the State of West Virginia and USDA. The 

hatchery was stocked with 188,000 eggs in 2000, using the market-proven Char as 

inventory. These facilities shipped 300,000 pounds of Char in 2003 and increased that to 

400,000 pounds in 2004. 

Shut-in Natural Gas Wells or Stripper Wells. Gas wells that once produced a significant 

amount of natural gas frequently lay dormant throughout the region. These wells don’t 

produce natural gas at a volume sufficient to go through large scale transmission lines, 

but do produce enough natural gas to fuel businesses. The Conservation Fund worked to 

harvest the resources of four such wells in Upshur County in West Virginia as a part of a 

pilot project. To date, these wells are being utilized to fuel a greenhouse which is now 

producing vegetables and herbs, and generating revenue year round with a free energy 

and water supply. 
ARC PROJECT GUIDELINES–APPENDIX B 32 

Gateway Communities. The Blue Ridge Mountains and the Great Smoky Mountain 

National Park are assets unique to the Appalachian Region. Communities as diverse as 

Asheville in North Carolina and Etowah in Tennessee have leveraged the beauty of this 

region, and the public spaces and parks, for their benefit. Annually, more than six 

million visitors make Asheville their destination of choice. Some come for the highly 

touted arts and crafts of the region (the oldest craft guild in the nation got its start here in 

1898). Some are attracted by the eclectic downtown which boasts fine restaurants, an 

assortment of shopping opportunities, and Art Deco architecture. Others are attracted by 

the myriad of outdoor activities such as hiking in the nearby national forests, whitewater 

rafting, fishing, driving down the Blue Ridge Parkway, or learning about the native 

Cherokee. Asheville is truly the gateway to the Smokies. And in Etowah, the community 

has renovated a historic railway depot and abandoned rail line, and now provides tourist 

excursions deep into the lush mountains. Etowah is also adjacent to the Ocoee River, 

renown for its whitewater rafting and home to a US Forest Service managed Olympic 

venue for whitewater racing (which is also open to the public). 

Cultural and Heritage Tourism. Berea, Kentucky has a long-established reputation as 

the Folk Arts and Crafts Capital of the State. Its tradition began in the late 19th century 

when Berea College started a crafts production program to help students pay for their 

education. In 2003, the Kentucky Artisan Center opened to encourage visitors to learn 

more about the Commonwealth’s crafts. The Center features local artists through retail 

displays of their work. Music, books, specialty food products, visual arts and crafts, and 

other handmade objects by Kentucky artisans are presented. In addition, the Kentucky 

Artisan Heritage Trails showcases interesting places, exciting events, wonderful food 

throughout eastern Kentucky. Over 170 businesses participate in the Trails program, and 

more then 70 new cultural-heritage businesses have opened in the region. And in August 

2004, the winding 200 mile stretch from Galax to Clintwood was dubbed Virginia’s 

Heritage Music Trail. Planners of “The Crooked Road” anticipate that within three years, 

the trail will be a nationally recognized heritage tourism destination and that within four 

years, the trail will generate triple the current revenues from tourism. 

Brownfields. In Titusville, Pennsylvania the site of the former Cyclops (Cytemp) Steel 

Company was gifted to the Titusville Redevelopment Authority when the company 

closed in 1998. The site has been developed into a world class industrial park. One 

element of the redevelopment plan included improvements to a building to house a 

100,000 square foot industrial business incubator that provided a common shipping and 

receiving area with access to cranes, forklift trucks, loading docs with different height 

bays and freight car loading services for rail transport. 

Asset Based Development - Eligible Activities 

As we identify the advantages of our Region, four broad opportunities for development become 

apparent: leveraging our Cultural Assets, our Natural Assets, our Structural Assets, and our 

Leadership/Community Assets. Each of these assets offer unique avenues for crafting new 

enterprise and injecting vitality into Appalachian communities. ARC’s Regional Initiative on 

Asset Based Development will support strategies that leverage these assets, including, but not 

limited to: 

 

 Cultural Assets. Building creative economies by capitalizing on traditional arts, culture, 

and heritage, supporting local entrepreneurs, and attracting visitors. These strategies 

include the creation of heritage trails, the development of apprenticeship programs, using 
ARC PROJECT GUIDELINES–APPENDIX B 33 

web-based or traditional retail venues to market products, as well as showcasing the 

Region’s music and narrative traditions. 

 Natural Assets. Opening the beauty of the mountains and rivers by leveraging unique 

ecological assets and the gateway communities leading there, including white water, 

fishing, camping trails and rock climbing. Enhancing natural advantage by adding value 

to the farm by processing specialty food items, fish farming and transitioning to organic 

products. Getting the most from the Region’s unique and productive hardwood forests by 

maximizing sustainable timber harvesting and value added processing. 

 Structural Assets. Just as we leverage our Region’s natural and cultural assets, we can 

also turn our community liabilities into opportunities, focusing on such strategies as 

Brownfield redevelopment, adaptive reuse, and downtown redevelopment. Converting 

overlooked and underused facilities into industrial parks, business incubators, or 

educational facilities have shown positive results across Appalachia. The Appalachian 

Development Highway System is an asset that can be leveraged for economic 

development as well. In West Virginia, four counties worked together to form a steering 

committee to select projects that could enhance the value of Corridor G. Throughout the 

Region, communities and businesses are integrating development and management 

practices to leverage what they have – historic buildings, abandoned railroads, scenic byways and old mines – to build and enhance economic vitality. 

 Leadership / Community Assets. Successful development takes place when business, 

government, nonprofit organizations, and community groups mobilize resources towards 

a common goal. Promising local leaders and emerging civic entrepreneurs are critical 

assets for developing—and redeveloping—opportunities in our region. Providing tools 

and resources for enhancing civic entrepreneurship is often a critical first step to 

leveraging local assets. Community assets include institutions such as Appalachia’s fouryear colleges, research institutions and two-year community colleges. 

 

Activities Not Supported by the Initiative 

Asset Based Development does not include filling gaps, addressing deficiencies, or the provision 

of amenities, which often occur at the expense of leveraging unique assets and community 

strengths. For example, support for a local symphony, ballet, or swimming pool – something that 

is not unique to the Region but are based in many mid-sized communities – would not well fit this 

Initiative, while support for indigenous community assets like the Carter Family Fold (in 

Virginia) or reclamation of an old industrial site such as the Cytemp Steel Co. facility in 

Titusville (Pennsylvania) are compelling asset based activities. 

 

Because ARC projects are funded with federal dollars, careful stewardship of those funds must 

exist. Therefore, ARC will closely scrutinize asset based development activities to determine 

their eligibility for funding as a part of this Initiative. State partners are encouraged to interact 

with POD staff often and early in the project development process to ensure that each project has 

the optimum opportunity to succeed. Projects will be considered on a case by case basis. 

 

Outcomes: Activities supported by this Regional Initiative must have economic impact – either 

by preparing the way for future sustainable growth through asset mapping or strategic planning, 

or supporting the implementation of projects that result in the direct creation of new jobs or 

businesses. Projects should demonstrate the potential for generating new revenue streams for 

Appalachian communities. Successful strategies include those that are proven or those that have 

a high chance for achieving the designated outcome, those that involve resources indigenous to 

the region, and those that have the potential to leverage additional funding from other public and 

private sources. 
ARC PROJECT GUIDELINES–APPENDIX B 34 

A Roadmap for Asset Based Development in Appalachia 

ARC is embarking on a comprehensive Asset Based Development work plan for the Region. 

ARC and partners-- including the National Endowment for the Arts, The Conservation Fund, The 

National Trust for Historic Preservation, the Southern Arts Federation, National Geographic 

Society, US Environmental Protection Agency, US Department of Agriculture, and the US Forest 

Service— are engaged in a broad range of activity to support Asset Based Development efforts. 

 

ARC suggests communities employ a roadmap to strategically build on their strengths, 

researching and structuring initiatives to ensure success when implementing these programs. 

Communities may begin by mapping their assets, and engage in strategic planning to articulate 

options and clarify directions. Alternately, if a clear direction has been well crafted, priority 

activities may involve financing or marketing asset based initiatives. Activities are eligible at any 

point along this development path. This roadmap for developing asset based initiatives includes: 

 

 Asset Mapping – identifying the unique assets of a region. This is a critical first step in 

building an asset based development strategy. Visually mapping assets – be they historic 

structures, scenic rivers, forest lands, or artisan studios – often serves as a catalyst to 

engage community leaders in creatively leveraging the strengths of a community. 

College partners or third party vendors can be helpful in completing GIS mapping 

profiles. 

 

 Strategic Planning – The provision of information and technical support to local leaders, 

as well as the crafting of a strategic vision, is essential to developing successful 

community efforts. Effective development takes place when business, government, and 

community groups mobilize resources towards a common goal. Convening these local 

leaders, with technical support from across the Region and across the nation, holds the 

promise for crafting asset based initiatives that truly impact the Appalachian economy. 

Local leadership and emerging civic entrepreneurs are critical for developing—and 

redeveloping—the assets of our Region. 

 

 Education and Training – Assisting new and aspiring entrepreneurs learn the old 

traditions of the Region while competing successfully in the marketplace. ARC has 

provided support to the Handmade Institute to form a Crafts Advisory Council and to 

develop a pilot apprenticeship program. This apprenticeship program, in partnership with 

the Region’s educational institutions, will train new artisans in old traditions. In 

addition, the Arts Business Institute is holding a series of ‘Bootcamps for Craft 

Entrepreneurs’, with the support of ARC and NEA, to help businesses successfully 

market the craft and traditions of the mountains. ARC will continue its partnership with 

the EPA to work on Brownfield redevelopment. And, ARC’s work to support youth 

entrepreneurship education programs will continue to encourage the development of 

locally-owned asset-based businesses in the Region. 

 

 Financing – Programs designed to help finance both private sector and social enterprises 

are important tools to effectively leverage a communities assets. ARC will continue to 

work to address the capital gaps of the Region—including providing support for the 

formation of development venture capital funds, micro-credit loan funds, and assisting 

the Region’s revolving loan funds to access private capital markets – is essential for the 

development of successful asset-based enterprises in Appalachia. 

 
ARC PROJECT GUIDELINES–APPENDIX B 35 

 Marketing – Activities designed to market the unique asset of the Region. Support could 

be targeted to branding of unique Appalachian products; development of distribution 

channels for value added agricultural products; and assistance for cooperative business 

efforts. As part of this initiative, ARC will not support marketing activities that generally 

promote local or regional tourism, or target single-site tourism destinations. Marketing 

activities will be held to a strict standard of review and performance. 

 

A Regional Focus 

ARC anticipates that these activities will catalyze a broad range of Asset Based Development 

efforts throughout the Appalachian Region, leveraging state and local and private sector 

investment, helping to shift the strategic planning focus at the state and local levels, and sparking 

a range of new policy initiatives across the Region. It is anticipated that strategic ARC central 

office investments will stimulate significant follow-on investment on the part of ARC state 

offices, as evidenced by ARC’s work in the area of leadership development, export trade, 

telecommunications, and entrepreneurship. In addition, the introduction of new development 

strategies is anticipated to shift the strategic planning focus at the local level as well. Local 

development organizations will begin to think about new directions and opportunities, crafting 

new strategies to address old problems. And new state policy initiatives (be they formation of 

equity funds, development of business incubation systems, or the modification of educational 

curriculum to support youth entrepreneurship programs -- as resulted within the field of 

entrepreneurship) can provide lasting change to a state’s development landscape. These Regional 

activities will both support the vision developed by local communities, and help ensure the 

success of community initiatives by creating a broad, sustainable framework for asset based 

development efforts. 

 

Links to Entrepreneurship: These Asset Based Development activities will build on the work of 

the Commission’s Entrepreneurship Initiative, which has provided over $31 million in support to 

more then 368 projects, resulting in the creation of over 5,000 jobs and 1,200 new 

businesses(through FY2003) (www.arc.gov/entrepreneurship). The Entrepreneurship Initiative 

assists homegrown businesses add jobs and increase wealth in the region. This Initiative has 

strengthened the infrastructure necessary to build an entrepreneurial economy by supporting: the 

development of venture capital and debt funds, the provision of technical assistance (through 

business incubator facilities and other strategies), and the development of entrepreneurship 

education and training programs for adults and youth. Asset-based activities will both leverage 

the success of these new enterprises, and continue to support the Region’s infrastructure for 

starting and growing locally owned businesses. 

 

Advisory Committee 

The Commission has convened an Advisory Committee to provide strategic direction for future 

ARC investments in the area Asset Based development. The committee will also be asked to 

identify opportunities for leveraging additional partnership efforts. Committee members reflect a 

diverse background in the field of asset-based development including expertise in natural assets, 

cultural assets, and community / leadership assets. Committee members include representatives 

from local non-profit development organizations, local communities, ARC Local Development 

Districts, ARC state program managers, national development groups, private sector 

representatives, and federal agencies. ARC will staff the committee, and will reimburse 

committee members for costs associated with participating in these sessions. 

 

Partnerships 

Engaging institutional partners and national best practice organizations will be critical to the 

success of this Initiative. On its own, ARC could provide funding to assist specific communities, 
ARC PROJECT GUIDELINES–APPENDIX B 36 

but long-term sustainable impact might not be achieved. To increase the likelihood of success, the 

Commission will invite key institutions to assist in conducting research, sponsoring educational 

conferences, the joint production of publications, the provision of mentorship and scholarship 

opportunities, the development of on-line resources, and the provision of direct financial 

support. Potential partners may include institutions, foundations, and national organizations.