x

Tennessee 

Resiliency 

Plan
1

TENNESSEE RESILIENCY PLAN

Executive Summary

Under the American Rescue Plan Act, the State of Tennessee will receive $3.725 billion in 

funds awarded via the US Treasury “Fiscal Recovery Fund” (“FRF”). The availability of onetime FRF funds presents a significant opportunity for Tennessee to: (i) Continue its 

response to the COVID-19 pandemic and its secondary effects; (ii) Invest in initiatives that 

support a strong economic recovery; (iii) Strengthen state fiscal stability.

To support the development of a comprehensive plan for Tennessee’s Fiscal Recovery 

Fund, Governor Lee has invited state agencies and stakeholders to submit proposals for 

consideration by the Financial Stimulus Accountability Group for inclusion in the state’s 

Tennessee Resiliency Plan. The Financial Stimulus Accountability Group (FSAG) is a joint 

bipartisan legislative and executive branch committee charged by the Governor with 

ensuring the appropriate and prudent planning for new federal funds received by the State 

of Tennessee. 

This document summarizes proposals that have been considered and recommended for 

expenditure by the Financial Stimulus Accountability Group (FSAG). As new expenditures 

are approved throughout the grant period, this document will be updated to reflect the 

state’s plan.

All proposals were subject to a process of review by the Department of Finance & 

Administration (F&A) and the Governor’s Office for fiscal impact, eligibility, and alignment 

with state priorities. Proposals were then submitted for feedback and discussion with the 

FSAG. Recommended proposals are posted for public comment and community 

engagement prior to final approval. 

Background on the ARPA State Fiscal Recovery Fund

On March 11, the American Rescue Plan Act of 2021 (“ARPA”) was enacted into law, 1

expending $1.9 trillion in federal spending to respond to the COVID-19 pandemic. Several 

components of the Act build on previous programs included in earlier federal relief 

packages.

Notable federal appropriations under the ARPA include the following:

1 H.R. 1319, American Rescue Plan Act of 2021 (enacted on March 11, 2021 as Public Law 117-2) 

https://www.congress.gov/bill/117th-congress/house-bill/13192 This is a separate and independent award from 

the CARES Act Coronavirus Relief Fund, available until Dec 31, 2021. 
2

• $412 billion for Economic Impact Payments to individuals;

• $350 billion for the Coronavirus State and Local Fiscal Recovery Funds;

• $122.7 billion for Elementary and Secondary School Emergency Relief Fund;

• $50 billion for FEMA’s Disaster Relief Fund to respond to disaster declarations;

• $47.8 billion for testing and tracing activities for COVID-19;

• $39.6 billion for Higher Education Emergency Relief Fund;

• $39 billion for childcare subsidies and grants to childcare providers;

• $30.5 billion for grants to transit agencies;

• $36.6 billion for rental and mortgage assistance;

• $28.6 billion to establish a Restaurant Revitalization Fund;

• $10 billion for Coronavirus Capital Projects Fund.

Each of these programs are subject to further programming and distribution by federal 

agencies and state-by-state distribution may vary.

Funding for State and Local Governments under the American Rescue Plan

The ARPA established a new US Treasury Program, the Coronavirus State and Local Fiscal 

Recovery Fund (“FRF”),

2 with the intent of assisting states and local governments in 

mitigating the fiscal effects of the COVID-19 pandemic.

Tennessee has received $3.725 billion from the State Fiscal Recovery Fund. Tennessee 

counties, metros, and non-metro cities are estimated to receive a combined total of $2.28 

billion in Local Fiscal Recovery Fund awards. The Local Fiscal Recovery Fund is divided into 

three separate distributions: $1.326 billion for counties, $516 million for metropolitan 

cities, and $438 million for “non-entitlement units of local governments.”3

FRF awards are distributed directly by the U.S. Treasury to states, counties, and metro 

cities.4 The remaining local governments, referred to by Treasury as “non-entitlement units 

of local government,” must draw funding from state governments who must distribute 

funds per federal formula and criteria. States are required to allocate funds to nonentitlement units of local government within 30 days of receiving the payment from the 

2 This is a separate and independent award from the CARES Act Coronavirus Relief Fund, available until Dec 31, 

2021. 

3 “Non-entitlement units of local government” are defined by the act as a city that is not a metropolitan city as 

defined in the Housing and Community Development Act of 1975 (42 USC §5302(a)(5)).

4 Eighteen metro cities in TN will receive funding directly from the U.S. Treasury – Bartlett City, Bristol, 

Chattanooga, Clarksville, Cleveland, Collierville Town, Franklin City, Hendersonville, Jackson, Johnson City, 

Kingsport, Knoxville, Memphis, Morristown, Murfreesboro, Nashville-Davidson, Oak Ridge, Smyrna Town. 
3

Treasury. The Department of Finance and Administration has launched a system and portal 

for non-entitlement units to draw down distributions.5

State and Local Fiscal Recovery Funds are statutorily limited to the following uses: (i) to 

respond to the COVID-19 pandemic and its negative economic impact, (ii) provide premium 

pay to essential workers, (iii) supply government services to the extent the government has 

experienced a revenue reduction relative to the previous fiscal year, and (iv) investments in 

water, sewer, and broadband infrastructure. On May 10, the U.S. Treasury’s Interim Final 

Rule was adopted to provide further guidance on eligible uses within these overall 

categories. 6

Under the Treasury’s Interim Final Rule, FRF funding may be used to support a broad range 

of public health needs as it can be demonstrated that such needs have been exacerbated 

by the pandemic. Eligible public health expenditures include mental health services, home 

visiting programs, and support for vulnerable populations to access health care services. 

Recipients may also use FRF to provide wage enhancements to eligible essential workers.

To alleviate economic hardship, FRF may be applied to provide relief to individuals, nonprofits, and businesses directly impacted by the pandemic. Eligible uses include job training 

for unemployed workers, loan programs for small businesses and non-profits, expansion 

of affordable housing developments, and increased capacity of child-care services.

FRF can support physical infrastructure investments without a specific nexus to COVID, but 

only if such investments fall within the statutorily prescribed “necessary sewer, water, and 

broadband” projects. The Treasury Interim Final Rule states that Broadband projects are 

expected to deliver symmetrical upload and download speeds of 100 Megabits per second 

wherever feasible. The Treasury Interim Final Rule also states that for sewer and water 

investments, guidance aligns eligible projects to those that meet the requirements of EPA’s 

Clean Water Revolving Fund and Drinking Water State Revolving Fund.

Recipient governments who have experienced year-to-year revenue loss may use FRF 

funding to replace lost revenue for the provision of government services. The Interim Final 

Rule establishes a methodology for recipients to calculate revenue reductions that 

5 Non-entitlement unit local governments who have not drawn down funds should visit the Tennessee 

Department of Finance and Administration, “Distribution Information for NEU Local Government” website at 

https://www.tn.gov/finance/coronavirus-local-fiscal-recovery-fund---state-guidance-for-localgovernments/distribution-information-for-neu-local-governments.html

6 “Coronavirus State and Local Fiscal Recovery Funds, Interim Final Rule,” Department of the Treasury, 31 CFR 

Part 35 RIN 1505-AC77, May 10, 2021, https://home.treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf.
4

occurred as a result of the pandemic. Due to Tennessee’s relatively strong economic 

recovery, the State does not qualify for revenue replacement.

The Interim Final Rule also specifies unallowable uses. These include paying down 

unfunded pension liabilities, reducing taxes directly or indirectly, paying interest or 

principal on outstanding debt, and making contributions to a “rainy-day” fund or similar 

reserve. 

Recipients may only use funds to cover costs incurred between March 3, 2021, and 

December 31, 2024. The Interim Final Rule determines that costs will be considered 

“incurred” if they are obligated by December 21, 2024. FRF funds not expended by 

December 31, 2026, must be returned.

The Act additionally created a new $10 billion Coronavirus Capital Projects Fund for the 

Treasury Department to make separate payments to states, territories, and tribal 

governments to carry out capital projects to support work, education, and public health. 

Tennessee is estimated to receive $216 million in this fund. State plans for the Coronavirus 

Capital Projects Fund must be submitted by Dec. 31, 2022.

The State of Tennessee’s Response to the Fiscal Recovery Fund

Since the launch of the Fiscal Recovery Fund program by U.S. Treasury, the State of 

Tennessee has engaged in a deliberative and comprehensive process of engagement in the 

regulatory and legal process to support the effective implementation of these funds. 

First, the Treasury Interim Final Rule, under the federal Administrative Procedure Act, was 

subject to a period of public comment. Governor Bill Lee submitted a comment 

encouraging Treasury to amend key provisions that limited the flexibility of states to target 

these funds to communities, organizations, and individuals that needed it the most.7

Specific attention was given to Treasury restrictions on sewer and water infrastructure not 

referenced in statute, a timeline for performance that may prove challenging in light of 

foreseeable supply chain challenges, and the imposition of guidelines that will reduce 

access for disadvantaged populations who lack the time, ability, or resources needed to 

navigate Treasury’s required controls and processes.

7 See Comment of Governor Bill Lee, July 15, 2021, available at https://www.regulations.gov/comment/TREASDO-2021-0008-0741 (commenting on U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery 

Funds Interim Final Rule, Docket ID: Docket ID: TREAS-DO-2021-0008-0002, 86 Fed. Reg. 26786 (May 17, 2021)) 
5

In addition to engaging in the regulatory rulemaking process, Tennessee preserved its legal 

rights, challenging the enactment of a tax mandate provision that sought to coerce any 

state receiving ARPA funds against lowering taxes for its citizens. On September 27, the U.S. 

District Court for the Eastern District of Kentucky ruled in favor of the State of Tennessee 

and Commonwealth of Kentucky in its lawsuit against the United States Treasury, issuing a 

permanent injunction against the Treasury Secretary from enforcing the Tax Mandate.8

To prepare for the prudent expenditure and a planning for FRF dollars, the Financial 

Stimulus Accountability Group convened multiple times to develop a set of consensus goals 

and unified strategy for expenditure of funds. Meetings of the FSAG are streamed live and 

meeting materials are published for public review.9 On March 29, 2021, the FSAG discussed 

the details of the ARPA and committed to the following goals:

• Plan one-time infrastructure improvements in water, sewer, and broadband or 

other eligible capital projects; 

• Align allowable uses of ARP funds to state’s strategic goals and review proposals for 

initiatives to improve health outcomes and support economic, and community 

development; 

• Develop a single comprehensive approach for economic relief;

• Address the state’s role in supporting prudent local government administration.

On June 2 and August 4, the FSAG reviewed and confirmed state plans to invest in the 

following programs of work using FRF:

• After identifying a historic backlog of needs in sewer, water, and broadband 

infrastructure, the FSAG launched two comprehensive infrastructure programs that 

would leverage local ARP funds to rebuild necessary sewer, water, and broadband 

infrastructure.10

• After discussing the unprecedented amount of funds to be administered by local 

entities, the FSAG recommended and the administration has invested in a Local 

Government Technical Assistance program that would train local governments on 

8 “Federal Court Rules in Favor of Tennessee, Kentucky, Halts Unconstitutional Tax Mandate”, Tennessee 

Attorney General & Reporter (Sept. 27, 2021) available at

https://www.tn.gov/content/dam/tn/attorneygeneral/documents/pr/2021/pr21-36.pdf

9 For all materials reviewed by the FSAG, please visit the Department of Finance & Administration website at 

https://www.tn.gov/finance/looking-for/stimulus-financial-accountability-group.html

10 For more details on these programs, see “INFRASTRUCTURE” infra pp. 13-19.11 Section 9. US Department of the 

Treasury, Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, p27, available at 

https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf
6

necessary grant management and compliance and provide annual review of local 

government plans.

In September, the FSAG convened multiple times to review state agency capital and 

program proposals to improve health outcomes and support economic and community 

recovery and resilience. FSAG members participated and shared significant comments and 

feedback to inform the development of the state’s Tennessee Resiliency Plan. 

On October 6 and November 15, the FSAG met to review these recommendations, forming 

the next steps in launching the Tennessee Resiliency Plan. Each proposal included in the 

Tennessee Resiliency Plan has been the result of a collaborative effort between state 

agencies and the FSAG, and all proposals have been vetted for eligibility, effective project 

management, and long-term fiscal impact on the state of Tennessee. 

This first tranche of spending priorities that reflect the most urgent needs and 

opportunities for Tennessee include:

• Sewer, Water, and Broadband Infrastructure initiatives;

• Capital investments to improve the resiliency of state and local public health 

systems;

• Continuation of the state’s Healthcare Provider Staffing Assistance program

(formerly, the Hospital Staffing Assistance Program) and expansion of the program 

to other affected long-term care facilities;

• Immediate support to Tourism, Agriculture, and Arts and Culture Industries.

The plan also reserves specific funds for future planning purposes:

• $275 million is reserved for future planning around relief to affected industries, nonprofits, and other organizations. Requests for new relief program will be 

administered via competitive grant application after review by FSAG.

• $119.4 million is reserved for future planning around additional state public health 

facility projects that would strengthen the state’s capacity to respond to COVID-19.

Several agency proposals were also deferred for additional briefing by the FSAG. These 

proposals were identified as eligible for funds but requiring additional briefing by the 

group. The administration will provide FSAG members with a briefing schedule for those 

proposals. With these additions and reservations, a balance of approximately $454 million 

remains unallocated in the Fiscal Recovery Fund as of December 11, 2021.
7

Additional Recovery Plan Reporting 

Promoting Equitable Outcomes

The State of Tennessee is committed to equitable use of these funds to meet the dissimilar 

needs of communities in the state. Given the disparate impacts of the COVID-19 pandemic 

of different communities, the state will closely evaluate unmet needs and appropriately 

tailor its responses to meet the needs within each expenditure category. Tennessee plans 

to support communities equitably across its investments to meet needs in public health, 

the negative economic impacts of the pandemic, the provision of services to 

disproportionately impacted communities, premium pay for essential workers, and 

infrastructure (water, sewer, and broadband). The State of Tennessee does not anticipate 

using SFRF funds for revenue replacement.

Community Engagement

The planning for the Tennessee Resiliency Plan incorporated written, oral and other forms 

of input that captured diverse feedback from constituents, community-based organizations 

and the communities themselves. Through the Financial Stimulus Accountability Group, the 

State of Tennessee engaged in a months-long planning process that received written 

feedback from community organizations, local government agencies, and constituents. The 

Group’s appointees also represent a diverse array of lawmakers representing communities 

of varying income, racial demographics, English proficiency, and proportion of underserved 

communities. 

Labor Practices

The State of Tennessee intends to utilize its share of the American Rescue Plan’s State 

Fiscal Recovery Fund to support its recovery from the Covid-19 pandemic. Infrastructure 

investment authorized under the Act will continue to be a major priority for the State of 

Tennessee. The State will ensure that all funds are utilized in accordance with the Act and 

guidance from the U.S. Department of the Treasury and the Office of the Inspector 

General, including any statutory or regulatory requirements for procurement or labor 

practices.

Use of Evidence

The State of Tennessee has remained long-committed to an evidence-based approach to 

budgeting and expenditure. In 2019, Governor Bill Lee launched the Office of Evidence & 
8

Impact (OEI), which resides within the Budget Division of the Department of Finance and 

Administration. OEI is a consulting office on all state agency initiatives included in this plan 

and has assisted state agencies with identifying key outcomes and metrics to measures 

success for each initiative. As agencies move into implementation of these programs, OEI 

will continue to be consulted and will support state agencies with the development of 

evidence-building strategies where required for a given project. Detailed plans for 

individual projects will be developed confirmed the issuance and review of the final rule by 

US Treasury. This will also be supported by the development of a Program Inventory, the 

details for which are included in this report.

Ineligible Activities / Lost Revenue

The State of Tennessee will continue to consider but has no reportable projects related to 

the use of Fiscal Recovery Funds for Revenue Replacement. By submitting this report, 

Tennessee does not concede that 42 U.S.C. § 802(c)(2)(A) or any regulation implementing 

that provision is a valid funding condition, and the State reserves its right to challenge that 

condition in any appropriate forum.

Recovery Plan Performance Indicators

Treasury guidance speaks to two sets of performance indicators for reporting, with one set 

described as Mandatory performance indicators.

Voluntary Performance Indicators

Treasury guidance states that the Recovery Plan should include “key performance 

indicators for the major SLFRF funded projects undertaken by the recipient.”11 It states 

further that recipients may report “key performance indicators for each project or may 

group projects with substantially similar goals for each individual project as well.” This 

portion of Treasury guidance is distinct from the required performance indicators 

Currently, Tennessee’s plan can be grouped by four major categories of expenditure:

• Expenditure Category 1. Public Health

• Expenditure Category 2: Negative Economic Impacts

• Expenditure Category 5. Infrastructure

• Expenditure Category 7: Administrative

11 Section 9. US Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Compliance and 

Reporting Guidance, p27, available at https://home.treasury.gov/system/files/136/SLFRF-Compliance-andReporting-Guidance.pdf
9

The state’s performance indicators for each of those categories are described in greater 

detail below.

Expenditure Category 1. Public Health

The state’s Public Health investments are targeted to improve the resiliency of state and 

local public health systems. This plan outlines several Public Health projects: 

• State Public Health Laboratory Replacement

• DIDD Regional Seating and Positioning Clinic Replacements 

• Local Health Department Capital Investments

• Healthcare Facility Staffing Assistance Grants

• Reservation of Funds for Additional Expenditure for Capital Investments that 

Respond to the COVID-19 public health emergency

For this group of public health expenditures, key performance indicators will be: Increased 

volume and new tests and technologies; Improved safety and efficiency of laboratory 

operations; Increased “surge capacity” for emergent events as a result of COVID-19;

Increased in children and vulnerable adults receiving healthcare supports and intervention 

services; Decrease in hospital and correctional institutional stays; Reduction in time to next 

available appointment; Improvement in Staff and patient satisfaction scores; Reduction in 

turnover amongst critical staff positions in Tennessee healthcare facilities; Increase in the 

capacity of state correctional facilities to treat more individuals in state custody.

Expenditure Category 2: Negative Economic Impacts

The state’s investments in Negative Economic Impact projects are targeted to improve the 

resiliency of state and local economies and affected industries. Those projects are:

• Unemployment Insurance Tax & Benefits System 

• Support for TN Arts Organizations 

• Tennessee Tourism & Hospitality Recovery Fund (Pass through grant for 

Destination Marketing Organizations) 

• Tennessee Tourism ARP Marketing Fund Request 

• Commercial Agriculture & Forestry Supply Chain Enhancements 

• Sevier County Tourism Support Project 

• Anderson County - Aspire Park Support Project

• Reservation of Funds for Future Planning for Relief to Affected Industries

For this group of expenditures targeted to negative economic impacts, key performance 

indicators will include: UI Claims processed within federal first pay timeliness standards; 
10

decreased of improper pay rate levels to pre-pandemic levels; improved economic health 

of non-profit arts and culture institutions as measured by survey; percent of art and 

cultural organizations that reopen or stay open after receiving a grant; new business 

formation; increases in tourism activity; improvements in the supply chain for agriculture 

and forest products; increased economic activity in rural distressed and at-risk counties. 

Expenditure Category 5. Infrastructure

The state’s investments in eligible sewer, water, and broadband infrastructure projects are 

targeted to improve the resiliency of state and local economies and address historic needs, 

deferred maintenance, and necessary improvements in the delivery of essential public 

services. 

Performance indicators used for eligible infrastructure projects include: increases in 

households served with water, sewer, or broadband services.

Mandatory Performance Indicators

In addition to voluntary performance indicators, U.S. Treasury Guidance12 also speaks to 

mandatory performance indicators for the following expenditure categories:

Household Assistance (EC 2.2 & 2.5) and Housing Support (EC 3.10-3.12)

This plan does not currently include projects within this expenditure category.

Negative Economic Impacts (EC 2):

This plan includes several projects that fall under the category of negative economic impacts.

The required data to be collected for projects that address negative economic impacts are:

• Number of workers enrolled in sectoral job training programs 

• Number of workers completing sectoral job training programs 

• Number of people participating in summer youth employment programs

The state of Tennessee administers multiple programs that may yield data relevant to these 

factors, however, no projects currently included in the State’s Fiscal Recovery Fund plan directly 

address sectoral job training programs or summer youth employment. The State of Tennessee 

seeks further guidance as to whether this section of Treasury guidance requires the reporting of 

data from programs not funded with Fiscal Recovery Fund monies. 

12 Section 10. US Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Compliance and 

Reporting Guidance, p27, available at https://home.treasury.gov/system/files/136/SLFRF-Compliance-andReporting-Guidance.pdf
11

Education Assistance (EC 3.1-3.5)

This plan does not currently include projects within this expenditure category.
Summary of Adopted Budget (as of December 8, 2021)

Expenditure Category State Agency Project Budgeted Amount Expenditures 

to Date 

5. Infrastructure Environment and 

Conservation 

Enhancements to Water and Wastewater 

Infrastructure 

$1,351,922,145.00 $- 

5. Infrastructure Economic and Community 

Development 

Broadband Infrastructure $500,000,000.00 $- 

1.7 Capital Investments or 

Physical Plant Changes to 

Public Facilities that 

respond to the COVID-19 

public health emergency

Health State Public Health Laboratory $200,000,000.00 $- 

1.7 Capital Investments or 

Physical Plant Changes to 

Public Facilities that 

respond to the COVID-19 

public health emergency

Intellectual and 

Developmental Disabilities 

DIDD Regional Seating and Positioning Clinic 

Replacements 

$180,600,000.00 $- 

1.7 Capital Investments or 

Physical Plant Changes to 

Public Facilities that 

respond to the COVID-19 

public health emergency

Health Local Health Department Capital Investments $128,966,391.00 $- 

4.2 Public Health - Private 

Sector Employers

Health Healthcare Facility Staffing Assistance Grants $120,000,000.00 $- 

1.4 Prevention in 

Congregate Settings 

(Nursing Homes, 

Prisons/Jails, Dense Work 

Sites, Schools, etc.)*

Correction Electronic Health Records project and supporting 

Infrastructure 

$13,050,000.00 $- 

2.6 Unemployment 

Benefits or Cash Assistance 

to Unemployed Workers*

Labor Unemployment Insurance Tax & Benefits System $61,000,000.00 $- 
13

2.12 Negative Economic 

Impacts-Aid to Other 

Impacted Organizations

Arts Commission Support for TN Arts Organizations $80,000,000.00 $- 

2.11 Negative Economic 

Impacts-Aid to Tourism, 

Travel, or Hospitality 

Tourism Tennessee Tourism & Hospitality Recovery Fund 

(Pass through grant for Destination Marketing 

Organizations) 

$55,000,000.00 $- 

2.11 Negative Economic 

Impacts-Aid to Tourism, 

Travel, or Hospitality 

Tourism Tennessee Tourism ARP Marketing Fund Request $45,000,000.00 $- 

2.12 Negative Economic 

Impacts-Aid to Other 

Impacted Industries 

Agriculture Commercial Agriculture & Forestry Supply Chain 

Enhancements 

$50,000,000.00 $- 

2.11 Negative Economic 

Impacts-Aid to Tourism, 

Travel, or Hospitality 

Transportation Sevier County Tourism Support Project $52,100,000.00 $- 

2.11 Negative Economic 

Impacts-Aid to Tourism, 

Travel, or Hospitality 

Transportation Anderson County - Aspire Park Support Project $6,000,000.00 $- 

7.1 Administrative 

Expenses

Finance & Administration Administrative Costs $30,000,000.00 $357,666.25 

7.2 Administrative 

(Evaluation and Data 

Analysis)

Finance and Administration 

- OEI

Accelerating Program Inventory $2,000,000.00 $- 

7.2 Administrative 

(Evaluation and Data 

Analysis)

Finance and Administration 

- Internal Audit

Electronic Health Records project and supporting 

Infrastructure

$1,333,943.00 $- 

$2,876,972,479 $357,666.25
14
Expenditure 

Category 5

(INFRASTRUCTURE)
16

Enhancements to Water and Wastewater 

Agency: Environment and Conservation (TDEC)

Requested Amount: $1,351,922,145

Full Time Employees Requested: None

Summary:

Addressing Tennessee’s drinking water, wastewater, and stormwater infrastructure is a 

critical need.13 Reports produced by various sources cite necessary investment in 

Tennessee water infrastructure ranging from $5 to 15 billion dollars between now and 

2040.14 Tennessee’s communities and economy rely on access to clean, reliable, and 

abundant water resources and services. Water makes Tennessee thrive and supports many 

significant activities, such as:

• Drinking water and sewer services for residents and businesses,

• Agriculture,

• Major industrial operations,

• Transportation of goods on navigable waters, and

• Recreational activities on lakes, rivers, and streams.

A substantial level of investment is critical to reliably supply our state with water resources 

amidst rapid economic and population growth.

In August 2021, Tennessee’s Financial Stimulus Accountability Group (FSAG) dedicated 

$1.35 billion of Tennessee’s Fiscal Recovery Funds from the American Rescue Plan (ARP) to 

water, wastewater, and stormwater infrastructure projects. Of these funds, the Tennessee 

Department of Environment and Conservation (TDEC) will award approximately $1billion in 

the form of non-competitive grants to communities for eligible water, wastewater, and 

stormwater infrastructure projects as part of the Tennessee ARP Water Infrastructure 

Investment Program. Approximately $350 million will be allocated towards state-initiated 

priority projects. During a later phase of this program, TDEC will launch a competitive 

granting program using any remaining funds.

13 Throughout this document the phrases “water infrastructure” and “drinking water, wastewater, and 

stormwater infrastructure” are used interchangeably

14 One such report is the Tennessee Advisory Commission on Intergovernmental Relations report, Building 

Tennessee’s Tomorrow: Anticipating the State’s Infrastructure Needs – July 2018 through June 2023. See Table 

D-10a. Water and Wastewater Needs by County, July 2018 – June 2023 for a 5-year listing of self-reported needs.
17

With respect to the non-competitive grants, TDEC is targeting enhancements among 

community public drinking water systems, wastewater systems with a component of 

municipal or domestic wastewater (e.g., wastewater treatment plants, collection systems, 

and decentralized treatment systems), and stormwater management systems serving the 

public.

TDEC will use a non-competitive and formula-based approach to identify allocations and 

has determined that it will offer funds directly to county governments. As a noncompetitive granting program, application is by invitation only.

TDEC will provide county governments the opportunity to accept their grant allocation, with 

the expectation that counties will coordinate with water and wastewater utilities and 

stormwater systems serving customers in their county to identify potential projects for 

proposed use of funding. Any declined and remaining monies will be re-programmed to 

support innovative water infrastructure projects through state strategic priorities and/or a 

competitive granting program at a later date. TDEC and its partners strongly encourage 

counties and water and wastewater utilities and stormwater systems to collaborate and 

take advantage of this significant opportunity. Each county will be eligible to receive a base 

allocation plus a portion of monies determined based on county population. The formula

that will be used follows: County Allocation = $2,105,263 + [$800,000,015 * (County Population 

/ Tennessee Population)].

TDEC will publish proposed allocations for each county in mid-September as part of its 

draft investment plan. In summary, this approach sets aside $200 million for equal 

distribution among each of Tennessee’s 95 counties, providing each county a base 

allocation of $2,105,263. The remaining funds set aside for non-competitive grants, 

approximately $800 million, will be distributed to each county proportional to their 

population in addition to their base allocation. This methodological approach closely aligns 

with that taken by the US Treasury. It provides funding for projects roughly commensurate 

with customers served/provided access to water, wastewater, and stormwater services.

By distributing funds at the county level, the State of Tennessee and individual 

communities will have the opportunity to better leverage local ARP dollars as a source of 

required match. Additionally, counties are strongly encouraged to collaborate with all 

water, wastewater, and stormwater systems which operate in their boundaries to consider 

multi-system or regional solutions to enhancing water infrastructure. TDEC, ECD, the 

Comptroller’s Office, TAUD, and other parties are available to discuss the distribution of 
18

funds, if needed. Additional detail regarding expectations for county coordination amongst 

sub-recipients is provided below.

Proposal and Project Requirements

In preparing submittals for review and approval by TDEC, each applicant must adhere to 

the following proposal requirements. TDEC will be creating a proposal template to facilitate 

this process and ensure that applicants are submitting information that TDEC needs for

project review and approval.

o Proposed activities must meet eligibility requirements as included in US Treasury’s Final

Rule, which is anticipated in September 2021, and further as determined by the State of

Tennessee’s program distributing these funds, which is anticipated to be finalized in

November 2021. The public will have the opportunity to comment on these eligibility

requirements as stated in the draft investment plan released in September 2021.

o Proposals must be reviewed and approved by TDEC prior to commencement of work.

o Each county’s proposal, which could include multiple projects, must address 3 or more of

the following priority areas:

▪ Achieving compliance with local, state, and federal drinking water, wastewater, 

and stormwater water quality requirements

▪ Water loss reductions

▪ Infiltration/inflow reductions

▪ Asset management planning

▪ Modernization and/or optimization of facilities, equipment, and operations

▪ Replacement of lead service lines

▪ Water reuse

▪ Sustainable infrastructure / best management practices / stormwater 

management

▪ Consolidation / regionalization

▪ Managing risk / building resilience to extreme weather events, cybersecurity, or

other hazards

▪ Enhancing service to underserved communities

TDEC intends for collaborative activities between a county, its systems, and engineering

and consulting experts to identify eligible and investment-worthy activities (i.e., planning) to

be allowable expenditures under this granting program. In doing so, communities can feel

empowered to invest in thoughtful planning activities that will set them up for successful 

project execution and long-term infrastructure enhancements. In accordance with current 
19

federal guidance, all ARP funds must be obligated by December 2024 and spent by 

December 2026. This is a tight timeframe for major infrastructure projects, especially with 

the planning that is needed to develop strong projects. Depending on the needs of the 

individual system or community, proposed ARP projects may be focused on preliminary 

work required for larger, long-term projects that extend beyond the ARP timeframe. For 

example, reducing water loss will improve financial sufficiency of the system, which

may improve the future opportunities for projects financed through the State Revolving

Fund Program.

Timeline

TDEC will launch technical assistance, in partnership with TAUD, to execute completion of 

TN Infrastructure Scorecards in November 2021. TDEC will release final details of the noncompetitive, formula-based granting program in November 2021 following a public 

comment period on TDEC’s Draft Water Infrastructure Investment Plan in SeptemberOctober 2021. From November 2021-January 2022, TDEC and its partners will engage in 

frequent education and outreach activities to ensure communities are well informed of the 

granting program and associated details. In January 2022, sub-recipients will have their first 

opportunity to submit proposals to TDEC for proposed scopes of work for use of noncompetitive grant funds. TDEC will review those on a rolling basis and will accept proposals 

through December 2022. All ARP funds must be obligated by December 2024 and spent by 

December 2026.
20

Broadband Infrastructure

Agency: Economic and Community Development (ECD)

Requested Amount: $500,000,000

Full Time Employees Requested: Contracted services. ECD’s existing broadband staffing 

capacity is designed to support approximately $20 million in grant funding, and the 

proposal’s significant increase in funding will require an increase in contracted services and 

review of internal staffing. The job functions will remain similar among contracted services 

and State positions – it is the increased funding volume that is driving the request for 

increased administrative capacity.

Summary: To provide non-recurring funding to internet service providers and 

communities to facilitate broadband access to all Tennesseans while promoting programs 

that encourage broadband adoption and use.

Rationale: If we allocate funds to expand Tennessee’s broadband deployment efforts, then 

we expect to see a significant decrease in the number of Tennesseans lacking access to 

broadband service adequate to meet their daily needs related to distance learning, 

telecommuting and telemedicine. Key activities include programs designed to increase 

both infrastructure deployment and broadband service adoption. Results include a 

decrease approaching elimination of unserved households, as well as an increase in 

broadband adoption in Tennessee as reported by the FCC and American Community 

Survey (ACS).

Outcome: 

• Outcome 1: Program will facilitate broadband access to 400,000+ previously unserved 

Tennesseans by December 2024. 

• Outcome 2: Program will support ubiquitous coverage in counties designed as 

“Distressed” by the Appalachian Regional Commission by prioritizing broadband 

deployment projects in these counties so that 0 distressed counties remain unserved 

by December 2026 – thereby having a significant impact on the economic viability of 

distressed counties. 

• Outcome 3: Program will support communities in increasing broadband adoption, or 

the percentage of households subscribing to broadband service, to 70% from 61.5% by 

awarding $100 million in funding by December 2024.
21

Expenditure 

Category 1

(PUBLIC HEALTH)
22

Building a New State Public Health Laboratory

Agency: Health (TDH)

Requested Amount: $200,000,000

Full Time Employees Requested: None

Summary: Build and outfit a new State Public Health Laboratory (SPHL). Includes funding 

for planning and design, site prep, necessary demolition, construction, outfitting, and lab 

equipment.

The requirements of new tests and new equipment have strained the facility’s electrical 

system, and space to house pandemic response supplies and surplus equipment has been 

exhausted. During the pandemic, SPHL staff made the most of available space, but current 

conditions are not adequate to meet needs of routine, ongoing requirements, much less 

another pandemic. With increased demand for more sophisticated testing, such as Whole 

Genome Sequencing and biomonitoring, that enables public health to identify specific 

strains of pathogens causing disease and outbreaks, it is imperative that the SPHL have the 

appropriate infrastructure to build and maintain this specialized testing in support of 

outbreak response and containment. It is not possible to predict when the next pandemic 

will occur; therefore, it is essential to be prepared. The SPHL has helped the state respond 

to Ebola, Zika, MERS, West Nile, and now COVID-19. The one-time nature of ARP funds 

presents a unique opportunity to build preparedness for the next pandemic or public 

health event. 

Rationale: If the SPHL is not updated, then:

 Existing lab capacity and services will be strained.

 Facility maintenance costs will grow while not addressing long-term needs.

 Requests for new lab services from important programs, such as newborn screening, 

may not be able to be met. 

 Requests for expanded testing from agencies such as CDC will not be achievable.

Outcomes: 

• Outcome 1: Expansion of services to include increasing volume and new tests and 

technologies;

• Outcome 2: Improved safety and efficiency of laboratory operations;

• Outcome 3: Increased “surge capacity” for emergent events as a result of COVID-19:
23

DIDD Regional Seating and Positioning Clinic Replacements

Agency: Intellectual and Developmental Disabilities (DIDD)

Requested Amount: $180,600,000

Full Time Employees Requested: None

Summary: This proposal is to build three new regional offices for DIDD in Nashville, 

Greeneville, and Arlington, which would include delivering health care services to 

thousands of adults and children with disabilities. These facilities would house the three 

Seating and Positioning Clinics which provide direct services to children and adults with 

severe physical complexities, nursing and behavioral services, and services to improve the 

health outcomes of children and adults.

Adults and children with intellectual and developmental disabilities have been significantly 

impacted by the public health emergency—people with disabilities have a 3.5 times higher 

death rate from COVID-19 than the overall TN population.

DIDD’s Regional Offices provide access to needed health and behavioral services by those 

who specialize in support for people with intellectual and developmental disabilities 

including: Seating and Positioning Services; Nursing services including COVID testing, 

vaccination and contact tracing; Direct crisis intervention for persons with mental health 

concerns; Therapeutic services.

Rationale: If we allocate funds to provide for three (3) new regional facilities, then we 

expect to see more people supported through the Seating and Positioning Clinic, 

Tennessee Early Intervention Services (TEIS), Nursing Services, Therapeutic Services and 

Direct Crisis Intervention.

Outcome: 

• Outcome 1: People supported through the Seating and Position Clinic receive more 

effective and efficient services, allowing them to be more comfortable and living lives 

they’ve envisioned for themselves.

• Outcome 2: More children receiving early intervention services, which will decrease 

dependency of other DIDD services as children age into adulthood. 

• Outcome 3: Decreasing hospital and correctional institutional stays through proactive 

crisis intervention, allowing persons supported to remain in their homes and 

communities. 
24

Reservation of Funds for Future State Capital Planning

The FSAG has identified a wide array of eligible state capital projects that would 

enhance the healthcare capacity of the state and its response to COVID-19. 

However, existing state building processes, recent global supply chain challenges, 

price inflation, and volatile market conditions counsel the FSAG towards developing 

a careful plan for those projects that will have the highest likelihood of success in 

meeting Treasury’s performance deadline of Dec. 31, 2026. 

To facilitate that process, the FSAG is reserving $119.4 million for collaboration with 

Department of General Services and the State Building Commission to identify the 

projects that will be funded through the FRF.

The following proposals have been identified for further consideration and will be 

considered for funding in future planning by the FSAG.

• East TN Regional Health Laboratory $83,000,000

• Moccasin Bend Mental Health Institute $265,000,000

• Wilder Youth Detention Facility $219,500,000

• TEMA Central Warehouse $45,793,240

• Substance Use Residential Treatment Enhancement $26,520,000

• Middle Tennessee MHI Mechanical System Upgrades Phases I&II $20,910,000

• Turney Center Industrial Complex, Health Clinic Improvements $4,500,000
25

Tennessee Department of Health Local Department of Health 

Capital Investment Plan

Overview of Plan

The Tennessee Department of Health operates sites in 89 counties through seven 

administrative regions. During the COVID-19 pandemic, these local health departments 

were stretched beyond their limit. While staff rose to the occasion and adapted creatively, 

the long-term outlook for many health department facilities is that they are ill suited for 

another pandemic. In addition, per statute, county health department facilities are owned 

and maintained by county governments and staffed and administered by the Tennessee 

Department of Health. The result is a patchwork of varying ages of facilities, deferred 

maintenance projects, and variation in quality of facilities across Tennessee communities. 

The one-time nature of ARP funds is a perfect opportunity to make capital investments that 

will generate savings for both state and local governments. Improvements to electrical, 

HVAC, flooring, water, etc. will yield annual cost savings. In addition, updating oftendecades-old facilities will improve workflow and overall patient experience and satisfaction. 

Capital investments for health department facilities can be organized into three major 

categories:

1. New County Facilities and Renovations. 17 health department facilities are 

operating beyond their operational lifespan and need to be replaced. Additionally, 

27 health department facilities do not need to be replaced but are in need of 

significant renovations to continue providing adequate space for care and services.

Funds for these new facilities and renovations would be granted to the respective 

county governments to pursue a normal competitive bid process that would meet 

specifications provided by TDH. Two of these facilities are in distressed counties, 

and three are in at-risk counties. Most of these facilities were constructed in the 

1960s and 70s, and all of them are failing to meet the needs of staff and patients. 

2. Statewide Needs of Local Health Facilities. Investments to standardize health 

department facilities across the state and address physical infrastructure needs that 

will generate ongoing cost savings, including flooring, lighting, HVAC, roofing/leaky 

roofs, parking, and storage. During the pandemic, storage capacity has been 

overrun, and parking lots were ill equipped for the flow of vehicles that continue to 

receive drive-through services from health departments. Funds would be granted to 
26

the respective county governments to pursue a normal competitive bid process that 

would meet specifications provided by TDH.

3. Improvements to Regional Health Offices; Local Site Electronic Signs and 

Phone Systems.

Regional offices serve as the backbone to county health departments. These stateowned facilities offer a variety of regional services and provide direct support to 

county health departments. Two regional offices are past their operational lifespan 

and need to be replaced. TDH would partner with DGC/STREAM to construct these 

facilities; Electronic Signs: During the pandemic, information has changed rapidly, 

and the importance of a highly visible health department grew tremendously. 

Programmable electronic signs would allow health departments to display helpful 

information about testing hours/locations while improving the professional 

branding of TDH; Phone systems: 39 health department sites are in need of phone 

system upgrades to accommodate increased phone traffic and modern 

telecommunications standards. 
27

TDH Capital Investments (Part 1) - New County Facilities and 

Renovations

Agency: Health (TDH)

Requested Amount: $75,272,391

Full Time Employees Requested: None

Summary: Across the state, seventeen health department facilities are operating beyond 

their operational lifespan and need to be replaced. Funds for these new facilities would be 

granted to the respective county governments to pursue a normal competitive bid process 

that would meet specifications provided by TDH. Two of these facilities are in distressed 

counties, and three are in at-risk counties. Most of these facilities were constructed in the 

1960s and 70s, and all of them are failing to meet the needs of staff and patients.

Rationale: If health departments are modernized and fully functional, then:

• Staff efficiency will improve as they are not dealing with inadequate space and systems.

• Patient satisfaction will improve as customers experience updated facilities.

• Staff recruitment and retention will improve as working conditions improve.

• Ongoing maintenance costs will decrease with the use of more durable and updated 

facilities.

Outcome: 

These specific costs would directly address negative impacts resulting from the pandemic 

and enable county health departments to render quality care and treatment of individuals 

affected by the COVID-19 pandemic and future public health emergencies, as measured by 

the following outcomes: 

• Outcome 1: Improved access to care.

• Outcome 2: Reduction in time to next available appointment.

• Outcome 3: Improvement in staff and patient satisfaction scores.

Local Match: County facility replacement and renovation will be subject to a 25% local 

match up to a maximum of 10% of a county’s total ARP allocation. 
28

TDH Capital Investments (Part 2) Statewide Improvements to 

Local County Health Facilities

Agency: Health (TDH)

Requested Amount: $22,950,000

Full Time Employees Requested: None

Summary: Investments to standardize health department facilities across the state and 

address physical infrastructure needs that will generate ongoing cost savings, including 

flooring, lighting, HVAC, roofing/leaky roofs, parking, and storage. During the pandemic,

storage capacity has been overrun, and parking lots were ill equipped for the flow of 

vehicles that continue to receive drive-through services from health departments. Funds 

would be granted to the respective county governments to pursue a normal competitive 

bid process that would meet specifications provided by TDH. These specific costs would 

directly address negative impacts resulting from the pandemic and enable county health 

departments to render quality care and treatment of individuals affected by the COVID-19 

pandemic and future public health emergencies. 

Rationale: If health departments are modernized and fully functional, then:

• Staff efficiency will improve as they are not dealing with inadequate space and systems.

• Patient satisfaction will improve as customers experience updated facilities.

• Staff recruitment and retention will improve as working conditions improve.

• Ongoing maintenance costs will decrease with the use of more durable and updated 

facilities.

Outcome: 

• Outcome 1: Improved access to care.

• Outcome 2: Reduction in time to next available appointment.

• Outcome 3: Improvement in staff and patient satisfaction scores.

Local Match: County facility replacement and renovation will be subject to a 25% local 

match, or alternatively 10% of a county’s total ARP allocation. 
29

TDH Capital Investments (Part 3) Regional Health Office 

Construction, Electronic Signs, Phone System Upgrades, Admin 

Expenses

Agency: Health

Requested Amount: $30,744,000

Full Time Employees Requested: 2 contracted employees

Summary: Regional offices serve as the backbone to county health departments. These 

state-owned facilities offer a variety of regional services and provide direct support to 

county health departments. Two regional offices are past their operational lifespan and 

need to be replaced. TDH would partner with DGS/STREAM to construct these facilities. 

Moreover, during the pandemic, information has changed rapidly, and the importance of a 

highly visible health department grew tremendously. Programmable electronic signs would 

allow health departments to display helpful information about testing hours/locations 

while improving the professional branding of TDH. Finally, thirty-nine health department 

sites need phone system upgrades to accommodate increased phone traffic and modern 

telecommunications standards.

Rationale: If health departments are modernized and fully functional, then:

• Staff efficiency will improve as they are not dealing with inadequate space and systems.

• Patient satisfaction will improve as customers experience updated facilities.

• Staff recruitment and retention will improve as working conditions improve.

• Ongoing maintenance costs will decrease with the use of more durable and updated 

facilities.

Outcome: 

• Outcome 1: Improved access to care.

• Outcome 2: Reduction in time to next available appointment.

• Outcome 3: Improvement in staff and patient satisfaction scores.
30

Healthcare Facility Staffing Assistance Grants

Agency: Health (TDH)

Requested Amount: $120,000,000 (as amended on November 15)

Full Time Employees Requested: 1-2 contracted employees

Summary: This funding would ensure that Tennessee’s acute care hospitals and other 

long-term care facilities have the capacity to maintain and grow essential staff in order to 

meet the significantly increased demand due to COVID-19. This program was initially 

launched in September 2020 – June 2021 with CRF funding ($90M) and has been 

relaunched with remaining CRF funding with more limited criteria. This among has been 

increased from initial proposals, based on program reverting to broader criteria than in 

FY21 and the much smaller difference than previously expected as case counts, and 

hospitalizations have decreased from September projections. 

Rationale: If we provide funding to increase staff capacity, Tennessee’s acute care 

hospitals and other long-term care providers will be better prepared and able to meet the 

significant increase in service demand brought on by the COVID-19 pandemic.

Outcomes:

This proposal to support healthcare facility staffing needs resulting from the increased 

demand placed on systems and staff directly associated with the pandemic. Improved 

outcomes will be measured by a reduction in turnover amongst critical staff positions in 

Tennessee healthcare facilities.
31

Electronic Health Records Project and Supporting 

Infrastructure

Agency: Correction (TDOC)

Requested Amount: $13,050,000

Full Time Employees Requested: None

Summary: To provide non-recurring funding for the approved Electronic Health Records 

(EHR) project across the state at each prison. Requested funding is proposed to replace

prior-approved state appropriation (FY 2022) for execution of the project. The supporting 

infrastructure is included in the request, currently the required connections are not 

available to service the devices and software that will be included in the EHR project. 

Rationale: If we allocate funding to purchase the infrastructure to support the Electronic 

Medical Record Project, then we expect to increase effective workflow by enhancing 

efficiency with electronic medical records. This will allow for the medical and behavioral 

health providers to provide more efficient care to patients as they will not be hindered by 

the existing antiquated hard copy system, which is time consuming and takes them away 

from effective care. In addition, the providers can allocate the time to mission critical 

assignments and duties. The telehealth effort will be facilitated by the LAN infrastructure 

and allow for the providers to reach fragile populations more effectively and to provide 

needed services within the housing units.

This investment in electronic records infrastructure will enable medical and behavioral 

health providers to provide more efficient care to patients, and not be hindered by the 

existing inadequate hard copy medical records system which is time consuming and take 

time away from necessary patient care. This effort will also allow for more readily available, 

adequate care for more rural, fragile populations by allowing providers to have access to 

their records and make prompt care decisions. This system will be accomplished over 

multiple years, however, one-time funding, not multi-year, will be required.

Outcome: 

• Outcome 1: We intend to see an increase in the overall number of instances of providing 

clinical services and the ability to see more individuals each month with the use of 

Electronic Health Records/ Telehealth. 

• Outcome 2: During COVID, the ready access to health records were needed in 

completing the multitude of associated medical necessities. This would create more 
32

efficient availability of reports, pre-existing conditions, and effective communication of 

potentially life-threatening illnesses or situations. 

• Outcome 3: The Electronic Health Records/Telehealth technology will have a significant 

positive impact on telepsychiatry and telepsychology care. 
33

Expenditure 

Category 2: 

(Negative 

Economic Impacts)
34

Reservation of Funds for Future External Relief Planning

Amount Reserved: $275,000,000

The scale and scope of need by affected industries, businesses, non-profits, and 

other organizations continues to develop through the recovery from the pandemic. 

The FSAG will engage in a process of community engagement with these affected 

entities and will issue a request for proposals from entities seeking to apply for 

these funds. The FSAG reserves up to $275 million of Tennessee’s Fiscal Recovery 

Fund award for this purpose. The application period for this process closed on 

November 30, 2021.
35

Unemployment Insurance Tax & Benefits System

Agency: Labor and Workforce Development (LWFD)

Requested Amount: $61,000,000 

Full Time Employees Requested: None

Summary: To provide non-recurring funds for the unemployment insurance division for a 

new customized UI Benefits System. The Unemployment Division of the Tennessee 

Department of Labor and Workforce Development collects unemployment taxes based on 

the employers’ experience rating and the balance of the trust fund provides benefits to 

qualified claimants who become unemployed through no fault of their own.

Rationale: Unemployment Claims will be processed timely and accurately due to userfriendly features and less system errors. The state’s UI division will comply with federal 

guidelines and be in good standing with the Tennessee Comptroller of Treasury. Lastly, the 

number of overpayments will decrease due to fraud identification/prevention and less 

errors.

Outcome: 

The system requirements for an unemployment benefits system have increased due to the 

COVID 19 pandemic. The COVID 19 pandemic has resulted in an increase in federal 

programs, fraud attempts, USDOL program requirements increased, and changes in state 

employment security law. These additional dimensions have created the need for more 

funding for a customized/configurable system. To meet our first pay timeliness and 

improper pay rate goals, the TDLWD will need to enhance and customize its benefits 

system to meet demand during recessionary periods, prevent fraud, and comply with new 

federal regulations and state laws.

• Outcome 1: Claims processed within federal first pay timeliness standards

• Outcome 2: Decrease improper pay rate levels to pre-pandemic levels

• Outcome 3: No Audit Findings

• Outcome 4: Decrease in contractor/vendor reliance
36

Tennessee Nonprofit Arts and Culture Recovery Fund

Agency: Tennessee Arts Commission

Requested Amount: $80,000,000

Full Time Employees Requested: Contracted services for monitoring grants ($100,000 per 

year)

Summary: To provide non-recurring funding to address severe COVID-19-related economic 

harm to Tennessee’s nonprofit arts and culture industry by providing grants to over 200 

eligible arts nonprofits to recover and deliver arts and culture services in every TN 

Senatorial district.

The pandemic resulted in significant economic losses to the nonprofit arts sector because 

festivals and performing arts organizations cancelled events and museums closed their

doors to protect the public health, resulting in lost earned revenue. Nonprofits with inperson fund-raising events cancelled or saw significant losses. As nonprofits begin to 

resume services, their efforts are limited by lost revenue. This initiative is a step to address 

that negative impact. Prior to the pandemic, Tennessee’s nonprofit arts and culture sector 

was a $1.2 billion industry that supported nearly 40,000 jobs and attracted 18.6M 

attendees to events annually (Arts & Economic Prosperity 5). Research shows that arts are 

economic catalysts. The arts industry accelerates economic recovery. A growth in arts 

employment has a positive and causal effect on overall employment. The nonprofit arts 

industry, especially performing arts and museums, responded to the public health threat of 

the pandemic by widespread closings and restructurings. Ninety-seven percent of 

Tennessee arts nonprofits surveyed reported cancelled events, resulting in significant 

economic harm. Over the 13-month period ending March 2021, twenty-two (22) of the 

state’s largest arts and culture nonprofits reported $120 million in revenue loss. Tennessee 

Arts Commission data collected from the 200 arts nonprofits as part of the annual grant 

application process showed a drop of $80M in expenditures and $103M in revenues from 

FY20 to FY21.

Rationale: If we allocate grants to arts nonprofits hit hard by the pandemic, then we 

expect to see preservation of TN’s nonprofit arts and culture infrastructure and restored 

positive community and economic impact of arts activities in TN communities.

Outcome: 
37

• Outcome 1: The nonprofit arts and culture infrastructure of TN as measured by the 

number of nonprofits that operated as a going concern in 2021 is preserved. 

• Outcome 2: Tennesseans in all TN Senate districts continue to have access to arts 

experiences, resulting in improved overall quality of life for Tennesseans of all ages. 

• Outcome 3: The economic impact of the nonprofit arts sector as measured by 

organizational surveys and audience surveys shows recovery to pre-pandemic levels.
38

Tennessee Tourism & Hospitality Recovery Fund (Grants for 

Destination Marketing Organizations)

Agency: Tourist Development (TDTD)

Requested Amount: $55,000,000

Full Time Employees Requested: None

Summary: To provide $50M in grants to Destination Marketing Organizations in all 95 

counties for tourism marketing, and development restoring demand and increasing tax 

revenue and jobs in the tourism and hospitality industries. In addition, the Tourism 

Enhancement Grant, previously funded by ECD, awarding $5M to municipalities for tourism 

infrastructure projects. 

The Tennessee Tourism & Hospitality Recovery Fund is a grant to provide funds to 

Destination Marketing Organizations (DMOs) for tourism marketing and development 

initiatives to restore consumer demand, tax revenue and jobs. Destination Marketing 

Organizations are those designated by the city/county government as the organization 

charged with increasing tourism. DMOs in all 95 counties will be eligible to apply for 100% 

reimbursable grants up to the determined allocation for projects approved by Tourist 

Development.

Based on the individual needs of destinations, TDTD will work with individual DMOs 

through training on the value of tourism and how to generate revenue through attracting 

visitors, multi-year planning and implementation of marketing efforts. The grant allocations 

will be based on tax revenue collections for the top performing counties and the remaining 

counties placed in tiered groups based on economic performance.

In addition, reinstating and funding the Tourism Enhancement Grant will help communities 

improve or enhance existing tourism assets through infrastructure projects creating a 

better experience for visitors and increasing tourism-related economic impact. It will be a 

competitive grant where City or County governments can apply presenting proposed 

projects. Match amount for a county is determined by tier level designation at the time of 

application submission.

All programs presented have the mission of generating tourism growth in all 95 counties to 

drive job creation, tax revenue and new investments, thereby enriching the quality of life 

for every Tennessean.

Rationale:

Tourism in the State of Tennessee was negatively impacted by the economic shutdown 

caused by the COVID-19 pandemic. The pandemic is the single largest crisis to hit the 
39

leisure and hospitality industry, representing $303M in lost state revenue between March 

and December 2020. 

Outcomes:

The Tennessee Tourism and Hospitality Recovery Fund is a grant to provide funds to 

Destination Marketing Organizations (DMOs) for tourism marketing and development 

initiatives. Based on the individual needs of destinations, TDTD will work with individual 

DMOs through training on the value of tourism and how to generate revenue through 

attracting visitors, multi-year planning and implementation of marketing efforts. In 

addition, reinstating and funding the Tourism Enhancement Grant will help communities 

improve or enhance existing tourism assets through infrastructure projects creating a 

better experience for visitors and increasing tourism-related economic impact.
40

Tennessee Tourism ARP Marketing Fund Request

Agency: Tourist Development (TDTD)

Requested Amount: $45,000,000

Full Time Employees Requested: None

Summary: TDTD requests $45M in federal ARP funding for the purpose of restoring the 

tourism and hospitality economy in Tennessee which was devastated by the COVID-19 

pandemic. Programs outlined in this application are designed to generate consumer 

demand, aid businesses, restore jobs and approximately $300M in lost tax revenue. 

Rationale: If we allocate funds to increase tourism marketing, then we expect to see an 

increase in demand for leisure travel, resulting in higher visitation and therefore economic 

impact (visitor spending, tax collections, and employment) in the Tennessee travel and 

tourism industry. 

Outcomes: 

• Outcome 1: Total Arrivals. In 2019, Arrivalist estimated 96M trips occurred across 

Tennessee’s 95 counties. In 2020, this number declined by 10% to 86M.

• Outcome 2: Leisure & Hospitality Revenues. In 2019, the leisure and hospitality 

generated $1.4B in sales and use tax collections. Industry collections declined by 21% to 

$1.1B in 2020. Information will be tracked and provided by the Department of Revenue.

• Outcome 3: Leisure & Hospitality Employment. In 2019, the leisure and hospitality 

industry generated an annual average of 347K jobs. Industry employment declined by 

15% to an annual average of 292K. Information will be tracked and provided by the 

Department of Labor and Workforce Development.
41

Commercial Agriculture & Forestry Supply Chain 

Enhancements

Agency: Agriculture (TDA)

Amount: $50,000,000

Full Time Employees Requested: 2

Summary: To provide agricultural and forestry producers that were individually and 

specifically impacted by the pandemic cost-share dollars and financial incentives to 

implement best land management practices and expand agricultural, food, and forestry 

businesses. Focusing on value-added processing and long-term investments, these funds 

will strengthen and expand Tennessee agriculture and forestry supply chains. Grant 

applications for these funds must match the description of at least one of the following 

four categories and require a threshold or initial showing that the applicant was adversely 

impacted by the pandemic.

• Increase in Farm Income - This category includes projects that will increase farm income by 

offering farmers higher commodity prices than other markets, processing value-added 

products for farmers, or allowing a single farmer to add value to their own farm products.

• Increased Access to Markets - This category includes projects that will create or expand a 

market for Tennessee farmers or forest landowners, including reducing miles that farmers 

must transport their products to market or creating a new market entirely. 

•Increased Capacity - This category includes projects that will expand the capacity of an 

existing agricultural, food, or forestry business, including their production or processing 

capacity or the number of employees.

Rationale: The goal in awarding these grants is that by focusing on value-added 

investment, these funds will ultimately strengthen and expand Tennessee agriculture and 

forestry supply chains. If we allocate funds to specifically affected businesses via the Ag & 

Forestry Economic Development Fund, then we expect to address economic development 

opportunities in rural areas of Tennessee and enhance the supply chain for Agriculture and 

Forest Products. 

Outcome: 

• Outcome 1: A more robust Agriculture and Forestry Economy in Tennessee

• Outcome 2: Increased economic activity in Rural Distressed Counties.
42

Sevier County Tourism Support Project

Agency: Transportation (TDOT)

Requested Amount: $52,100,000

Full Time Employees Requested: None

Summary:

The cities of Sevierville, Pigeon Forge and Gatlinburg are widely recognized in the United 

States for their wide range of tourist related opportunities. Tourism, travel, and hospitality 

provide the underpinning for much of the economy of Tennessee. COVID-19 has negatively 

impacted many aspects of this industry. The pandemic is the single largest crisis to hit the 

leisure and hospitality industries, representing $303 million in lost state revenue between 

March and December of 2020.

During COVID‐19, vehicle counts and ADTs lowered drastically.The largest reduction seen in 

urban interstate traffic was in Nashville with a reduction of over 50% compared to 2019. By 

the end of May, traffic began rising with an overall reduction of only 10‐20% compared to 

2019. In comparison, by May 2020, several locations in Sevierville were nearly equivalent to 

their 2019 traffic counts. Even while many were locked down or staying at home, 

Sevierville, Pigeon Forge, and Gatlinburg were all major destinations for tourists.

With ample tourism related growth in the past two decades, plus a prime location in the 

foothills of America’s most visited national park with 10 million visitors annually, many 

people seek the various amenities Sevier County offers. New and upgraded hotels, the 

three Convention Centers, adventure attractions, wineries, distilleries, restaurants, and 

retail businesses are helping Sevier County grow and attract more visitors each year. 

Sevierville’s retail sales topped $1.6 billion dollars in 2019. With a “business friendly” 

reputation and more than 15 million annual visitors to the sister cities of Sevierville, Pigeon 

Forge, and Gatlinburg, Sevierville continues to draw solid interest from investors and 

developers.

Rationale: If funds are utilized to provide funding for the project, then access to tourism, 

travel, and hospitality venues will be improved allowing for more economic activity in 

Sevier County. 

Outcome: 

• Outcome 1: Tourism, travel, and hospitality investments by the private sector will 

increase along the US 411 corridor.

• Outcome 2: A reduction in crashes along the US 411 corridor.

• Outcome 3: An increase in throughput of vehicles along the US 411 corridor.
43

Anderson County - Aspire Park Support Project

Agency: Transportation (TDOT)

Requested Amount: $6,000,000

Full Time Employees Requested: None

Summary:

Support of Aspire Park in the City of Clinton in Anderson County through the construction 

of a multi-use recreational facility to expand pedestrian and bicycle infrastructure 

supporting the park along US 25W (SR 9).

Rationale: 

If ARP Act funds are utilized to provide funding for the project, then access to tourism, 

travel, and hospitality venues will be improved allowing for more economic activity in 

Sevier County. 

Outcome: 

• Outcome 1: Tourism, travel, and hospitality investments by the private sector will 

increase along the US 411 corridor.

• Outcome 2: A reduction in crashes along the US 411 corridor.

• Outcome 3: An increase in throughput of vehicles along the US 411 corridor.
44

Expenditure 

Category 7 

(ADMINISTRATIVE)
45

Administrative Costs

Agency: Finance & Administration (F&A)

Requested Amount: $30,000,000

Full Time Employees Requested: None

Summary: Funding equating to less than 1% of the CSFRF will be used to cover the costs 

of external consulting support to assist the state with managing and administering the 

CSFRF. This designation of $30 million in SFRF dollars to support/fund administrative costs 

is directly associated with the compliant management and disbursement of its SFRF 

allocation in compliance with U.S. Treasury guidance and standards. 

Rationale: Given the significant level of funding and complexities involved, contracting with 

external consultants will help ensure the state’s compliance with the requirements of the 

CSFRF. 

Outcome: Compliance with legal, regulatory, and other requirements of the Coronavirus 

State Fiscal Recovery Fund. 
46

Accelerating Program Inventory

Agency: Finance and Administration – Office of Evidence and Impact (F&A – OEI)

Requested Amount: $2,000,000 

Full Time Employees Requested: None

Summary: To provide non-recurring funding for a vendor to implement the program 

inventory process with the remainder of cabinet-level executive branch agencies over two 

years. After this additional capacity enables initial inventory completion, existing OEI staff 

positions will complete maintenance and annual data collection activities.

OEI seeks up to $2,000,000 of SLFRF funds to expedite program inventory work across state 

government. In keeping with the emphasis on evidence that exists in ARP guidance, this 

proposal maximizes the state’s ability to invest in programs that are working, reevaluate 

funding of programs that have produced negative results, and identify opportunities for 

further program evaluation. This is an administrative expense associated with the efficient 

use of SFRF dollars and the required reporting surrounding performance metrics. Allocating 

SFRF dollars towards this effort will allow the state to effectively identify efficient and positive 

performance metrics, outputs, and programs utilizing those metrics and outputs. These 

metrics and outputs are required for Treasury reporting and are, therefore, an allowable 

administrative expense associated with the use of these dollars.

Rationale: If we allocate funds to accelerate the completion of program inventories with all 

agencies, then state leaders will have access to better information and resources that support 

effective decisions and smart investments. This will support evaluation and data analysis of state 

Fiscal Recovery Fund programs.

Outcome: 

• Outcome 1: Increase in Tennessee’s investment in evidence-based health programs.
47
48

Electronic Workpapers for Remote Workforce

Agency: Finance & Administration (F&A) – Internal Audit

Requested Amount: $1,333,943

Full Time Employees Requested: None

Summary: Internal Auditors across Tennessee agencies are tasked with performing 

assurance and consulting services designed to add value and improve operations. The 

monitoring of internal control performance remotely and the ability to respond to public 

health concerns would be enhanced by electronic workpapers offering the analysis of 

aggregate risks and findings.

The pandemic has steered state governments to operate remotely and embrace digital 

technologies. While the audit process was evolving with the emergence of new technology, 

COVID-19 has significantly accelerated the evolution toward a virtual audit. The pandemic 

has sped up the process of change. Uncertainty, combined with the rapid shift to new ways 

of operating, has led to the need for thinking proactively. With the reduction or closing of 

workplaces and the need for social distancing, internal auditors are leveraging existing and 

new technology to conduct audits remotely, including remote data extraction, analysis, and 

inventory counts. 

Rationale: If we allocate funds to implement electronic workpapers, then we expect to see 

auditors performing more efficient assurance and consulting work, resulting in quicker 

identification of problem areas to management, better decision quality, and more timely 

corrective actions. Specifically, we expect electronic workpapers to:

• Provide a framework for productive execution, more audit & analysis, less 

documenting.

• Streamline fieldwork, documentation, and reporting – enable resource-strapped 

audit departments to accomplish more than they could using manual techniques.

• Facilitate team communication – keeps audit staff (especially those working 

remotely) on the same page and focused on the same goals.

Outcome: More effective tracking of data related to: 

• Monitoring and communicating changes in conformance to regulations/policy/rule; 

• Monitoring and communicating changes in percentage of ineligible vs. eligible 

expenses; and 

• Documenting evidence of fraud/waste/abuse.
49
50