THE LAW AND ITS REQUIREMENTS

The Low Income Home Energy Assistance Program, commonly called LIHEAP,
was authorized by a law passed by Congress and signed by the President
on August 13, 1981. The law is called the Omnibus Budget Reconciliation
Act (OBRA) of 1981. This law has been amended and reauthorized several
times by the following laws:

-   Title VI of the Human Services Reauthorization Act of 1984 (Public
    Law 98-558)

-   Title V of the Human Services Reauthorization Act of l986 (Public
    Law 99-425)

-   Title VII of the Augustus F. Hawkins Human Services Reauthorization
    Act of 1990 (Public Law 101-501)

-   Title III of the Human Services Amendments of 1994 (Public Law
    103-252)

-   Section 110(p) of the Personal Responsibility and Work Opportunity
    Reconciliation Act of l996 (Public Law 104-193)

-   Title III of the Coats Human Services Reauthorization Act of l998
    (Public Law 105-285)

The Coats Human Services Reauthorization Act of l998, signed October 27,
l998, reauthorized LIHEAP for five years, through FY 2004. In Appendix I
and Appendix II, we have provided the current law as amended and
regulations for LIHEAP.

The law delegates the oversight of the LIHEAP Program to the Secretary
of the Department of Health and Human Services (HHS). Within HHS, the
Division of Energy Assistance (DEA) in the Office of Community Services
runs LIHEAP for the federal government.

A tribe (or a state, or a territory) must agree to comply with the law
before the federal government will send it funds for LIHEAP. The
agreement to comply with the law submitted by the tribe to HHS includes
the chief executive officer\'s signature (usually the tribal chairman\'s
signature) certifying to the assurances in the law, and a plan
describing how the assurances will be implemented. The assurances and
what is required to be in a LIHEAP plan are the first sections of the
law discussed below. See Section E for a model plan format.

This section describes what the LIHEAP law requires. The law applies to
all components that may be offered through the LIHEAP program and
include: heating assistance, cooling assistance, crisis intervention
assistance and weatherization. HHS has written regulations that
interpret parts of the law; however, since LIHEAP is considered a "block
grant," most of the decisions about how the law should be interpreted
are left up to the tribes. HHS will normally defer to a tribe\'s
interpretation of the law unless it is clearly erroneous.

The LIHEAP statute also authorizes the Leveraging Incentive Program and
the Residential Energy Assistance Challenge Option Program (REACH).
These programs are further discussed in Sections K and L of this manual.
Grantees are not required to apply for these programs, but these
programs can provide additional funds to tribes to assist low-income
households with their energy needs.

On the following pages, passages from the law will be explained and some
examples of how other tribes interpret the legal passages will be
provided. Each tribe has primary responsibility for interpreting the law
and for making sure that the tribal LIHEAP program is run consistently
with the law. HHS is prohibited by law to prescribe how you will run
your program.

The major requirements of the law are discussed below. A copy of the law
and regulations can be found in Appendix I and Appendix II.

## SECTIONS AND EXPLANATIONS OF THE LIHEAP LAW

Please note that, unless otherwise stated, where the law refers to a
"state," it usually also means a tribe, tribal organization or
territory. Additionally, we are not listing the statute sections in
order as they are listed in the law, so that we can list the assurances
and plan requirements together.

**[Section 2605(a)(1)]{.underline}**

> Each State desiring to receive an allotment for any fiscal year under
> this title shall submit an application to the Secretary. Each such
> application shall be in such form as the Secretary shall require. Each
> such application shall contain assurances by the chief executive
> officer of the State that the State will meet the conditions
> enumerated in section (b).

This section means that the tribe, prior to receiving funds, must submit
a complete application to HHS. Section E describes the application
process and format.

**[Section 2605(a)(2)]{.underline}**

After the expiration of the first fiscal year for which a State receives
funds under this title, no funds shall be allotted to such State for any
fiscal year under this title unless such State conduct public hearings
with respect to the proposed use and distribution of funds to be
provided under this title for such fiscal year.

Tribes are [EXEMPT]{.underline} from holding yearly public hearings.
Tribes, however, under Section 2605(b)(12) of the law must provide
public participation in the design and development of the LIHEAP plan.
Tribes, at their option, may hold public hearings to satisfy this
requirement. Other ways are to discuss the plan at an open tribal
council meeting or use the tribal newsletter to solicit comments.

**[Sections 2605(b) and (c)]{.underline}** set out the specific
requirements of the law for the application for LIHEAP funds. The
application contains the certification to the assurances and the
descriptions on how the tribe will carry out the assurances. (This is
usually referred to as the application or plan.) These requirements must
be met and completed by the tribe before a LIHEAP grant will be issued
by HHS. The phrase \"met and completed\" means that the tribe must:

(1) agree to the assurances by signature of the Chief Executive Officer
    (usually the Tribal Chairman) or his designated official,

> 2\) provide a plan which describes how the tribe will implement 9 of
> the 16 assurances, and

(3) provide other information as required in Section 2605(c).

> (See page C-19)

Below, we have listed the 16 assurances.

**[Section 2605(b)(1) - Assurance #1 - Purpose of the
Funds]{.underline}**

Use the funds available under this title to\--

> \(A\) conduct outreach activities and provide assistance to low income
> households in meeting their home energy costs, particularly those with
> the lowest incomes that pay a high proportion of household income for
> home energy, consistent with paragraph (5);

\(B\) intervene in energy crisis situations;

(C) provide low-cost residential weatherization and other cost-effective
    energy-related home repair; and

> \(D\) plan, develop, and administer the State's program under this
> title including leveraging programs, and the State agrees not to use
> such funds for any purposes other than those specified in this title;

This means that the funds the tribe receives for LIHEAP must be used
only for purposes expressly authorized in the law. The purpose is to
provide heating and/or cooling assistance, crisis assistance,
weatherization and energy-related home repair (at the tribe's option)
and to conduct outreach to those households with the lowest income and
highest home energy needs.

Funds must be spent by the tribe only to assist eligible households to
meet the costs of home energy. LIHEAP funds may not be used, for
example, to pay for fuel to heat a school, a community center or a
household of someone who is not eligible to receive assistance.

LIHEAP programs offered by tribes have included heating assistance,
crisis intervention assistance, cooling assistance, weatherization and
low cost home repair. In addition to providing cash benefits to pay
heating or cooling bills, some tribes install wood burning stoves,
furnaces, air conditioners and provide fans.

**[Section 2605(b)(2) - Assurance #2 - Eligibility]{.underline}**

> Make payments under this title only with respect to --

(A) households in which 1 or more individuals are receiving --

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(i) assistance under the State program funded under part A of title IV
    of the Social Security Act \[TANF\];

> \(ii\) supplemental security income payments under title XVI of the
> Social Security Act;

(iii) food stamps under the Food Stamp Act 1977; or

> \(iv\) payments under section 415, 521, 541, or 542 of title 38,
> United States Code, or under section 306 of the Veterans\' and
> Survivors\' Pension Improvement Act of 1978; or
>
> \(B\) households with incomes which do not exceed the greater of\--
>
> \(i\) an amount equal to 150 percent of the poverty level for such
> State; or
>
> \(ii\) an amount equal to 60 percent of the State median income;
>
> except that a State may not exclude a household from eligibility in a
> fiscal year solely on the basis of household income if such income is
> less than 110 percent of the poverty level for such State, but the
> State may give priority to those households with the highest home
> energy costs or needs in relation to household income;

This section of the law defines who may be eligible to receive
assistance. It is particularly important because under this section the
tribe will define in its plan who may and may not receive LIHEAP
assistance from the tribe. The tribe has flexibility under this section
to include as eligible [all]{.underline} of those mentioned in the law,
or to limit eligible households to a smaller target group.

For example, the tribe may decide to consider automatically eligible
those households where a household member is receiving benefits from the
programs listed in (A) above. The tribe could make that household
eligible without regard to the household's total income. This is
commonly referred to as categorical eligibility.

Although the law allows categorical eligibility, the tribe must also
offer eligibility to households on the basis of income as required by
section 2605(b)(8). The maximum income eligibility is set at 150 percent
of the poverty level or 60 percent of the state's median income. The
eligibility limit cannot be set lower than 110 percent of the poverty
level, but tribes can set additional eligibility criteria such as an
assets test.

Eligibility can also be limited to give priority to households with "the
highest home energy costs or needs in relation to household income."

Those grantees that use the poverty income guidelines to determine
eligibility must update the guidelines to agree with the most recently
published figures. This must be done by October 1 of each year or the
grantee can adjust the guidelines any time between the date of the
newest publication and October 1. The annual updates of the poverty
income guidelines and state median income levels are usually published
in February and are sent to all grantees. Copies are also available from
HHS and can be downloaded from the LIHEAP web page. A copy of the most
recent guidelines can be found in Appendix III.

Because the decision concerning who is eligible is so important, we have
provided additional information on this subject in Section D.

##### Section 2605(b)(3) - Assurance #3 - Outreach

> Conduct outreach activities designed to assure that eligible
> households, especially households with elderly individuals or disabled
> individuals, or both, and households with high home energy burdens,
> are made aware of the assistance available under this title, and any
> similar energy-related assistance available under subtitle B of title
> VI (relating to community services block grant program) or under any
> other provision of law which carries out programs which were
> administered under the Economic Opportunity Act of 1964 before the
> date of the enactment of this Act;

Outreach is the set of activities the tribe uses to inform households
about its LIHEAP program. The law requires outreach to be designed to
reach households with elderly and/or disabled individuals, and those
households who pay a proportionately large amount of their income
towards energy costs.

Tribes have flexibility in deciding how to conduct outreach. Outreach
may be an ongoing activity or may consist of a few simple announcements.
The law does not say how extensive outreach must be. Some examples of
outreach methods used by tribes are:

-   posters and fliers

-   announcements in tribal newsletters or newspapers

-   speeches by LIHEAP personnel or other tribal officials at council
    meetings, church meetings, tribal meetings or other community
    meetings

-   door-to-door visits (this is especially helpful with the elderly and
    the homebound)

-   mailings, either by the LIHEAP office, or as part of other tribal
    mailings

-   utility company bill inserts (this will require that the LIHEAP
    program works directly with the utility company or companies that
    service the tribal area)

Most tribes carefully design outreach to reach all potentially eligible
households. They also begin outreach long before the program begins so
that word gets around about the program before the tribe stops taking
applications. Also, it may be necessary to carry out some of the
outreach activities more than once or continuously if the tribe wishes
to ensure that everyone is aware of LIHEAP.

Outreach materials often include enough information to help a household
make decisions about its participation in LIHEAP. Sometimes there are
eye-catching pictures, drawings, slogans or other memorable items on the
LIHEAP outreach material to catch the attention of eligible households.

Many outreach materials answer some or all of the following questions:

-   What is the name of the program and what does it offer? (description
    should be brief)

-   What are the benefits?

-   How does a household apply for and receive benefits?

-   What should a household member bring to the office when he applies?

-   What are the income and other eligibility requirements?

-   Are any dates and deadlines in effect?

-   Is there a phone number to call for assistance?

[S**ection 2605(b)(4) - Assurance #4 - Coordination**]{.underline}

> Coordinate its activities under this title with similar and related
> programs administered by the Federal Government and such State,
> particularly low-income energy-related programs under subtitle B of
> title VI (relating to community services block grant program), under
> the supplemental security income program, under part A of title IV of
> the Social Security Act, under title XX of the Social Security Act,
> under the low-income weatherization assistance program under title IV
> of the Energy Conservation and Production Act, or under any other
> provision of law which carries out programs which were administered
> under the Economic Opportunity Act of 1964 before the date of the
> enactment of this Act;

Coordination means that the LIHEAP staff should work with administrators
of other similar programs so that other program officials will be aware
of LIHEAP and can make referrals. Coordination often prevents undesired
overlap in services between agencies and their programs and ensures that
eligible households know about and receive the maximum services and
benefits available under all programs listed in this section of the law.
Most tribes work out coordination with the administrators of other
programs administered by the tribe, state LIHEAP programs, the
Department of Energy\'s Weatherization Assistance Program, the Community
Services Block Grant program, and the SSI program.

Examples of coordination used by tribes include:

-   Meetings between administrators of various tribal programs or state
    programs to discuss issues of mutual concern;

-   Referrals of clients from other tribal programs or state programs to
    LIHEAP or from LIHEAP to other programs;

-   Combined outreach efforts;

-   Joint intake procedures; and

-   Sharing records when not prohibited by law.

**[Section 2605(b)(5) - Assurance #5 - Benefit Levels]{.underline}**

> Provide, in a timely manner, that the highest level of assistance will
> be furnished to those households which have the lowest incomes and the
> highest energy costs or needs in relation to income, taking into
> account family size, except that the State may not differentiate in
> implementing this section between the households described in clauses
> (2)(A) and (2)(B) of this subsection;

The law requires the tribe in providing benefits in a timely manner to
take into account [energy costs or needs, income and family
size.]{.underline} The tribe should decide before people apply for
assistance how all of the factors will be taken into account. This is
most often done with a [payment matrix.]{.underline} The explanation of
a payment matrix can be found beginning on page D-15.

Additionally, this section of the law applies to those tribes who choose
to make eligible for LIHEAP those households who are income eligible as
well as households who are categorically eligible (households receiving
TANF, FS, SSI, and some Veterans benefits.) The law states that grantees
shall not treat these two

groups differently when determining benefits.

**[Section 2605(b)(6) - Assurance #6 - Designation of Local
Agencies]{.underline}**

> To the extent it is necessary to designate local administrative
> agencies in order to carry out the purposes of this title, to give
> special consideration, in the designation of such agencies, to any
> local public or private nonprofit agency which was receiving Federal
> funds under any low-income energy assistance program or weatherization
> program under the Economic Opportunity Act of 1964 or any other
> provision of law on the day before the date of the enactment of this
> Act, except
>
> that \--
>
> \(A\) the state shall, before giving such special consideration,
> determine that the agency involved meets program and fiscal
> requirements established by the State; and
>
> \(B\) if there is no such agency because of any change in the
> assistance furnished to programs for economically disadvantaged
> persons, then the State shall give special consideration in the
> designation of local administrative agencies to any successor agency
> which is operated in substantially the same manner as the predecessor
> agency which did receive funds for the fiscal year preceding the
> fiscal year for which the determination is made;

This section of the law mainly applies to tribes that wish to
sub-contract the administration of LIHEAP to another organization. The
agencies the law refers to are those that received funds in the past
from the Community Services Administration (CSA), the organization that
preceded CSA, the Office of Economic Opportunity, the Federal Energy
Administration, or the Department of Energy.

\"Special consideration\" is not defined in the law or the regulations.
It is up to the tribe to decide how to interpret this phrase. The law
does not say the tribe [must]{.underline} choose a particular agency to
run the program, but if the tribe were to sub-contract, it must
[consider]{.underline} the agency that received funds from CSA to run
the program. If the tribe sub-contracts part of the administration of
LIHEAP to another agency, then it should be able to explain how it gave
\"special consideration\" to the agencies to which the law refers.

Most tribes choose to run LIHEAP themselves and do not sub-contract to
another agency.

**[Section 2605(b)(7) - Assurance #7 - Energy Suppliers]{.underline}**

> If the state chooses to pay home energy suppliers directly, establish
> procedures to\--
>
> \(A\) notify each participating household of the amount of assistance
> paid on its behalf;
>
> \(B\) assure that the home energy supplier will charge the eligible
> household, in the normal billing process, the difference between the
> actual cost of the home energy and the amount of the payment made by
> the State under this title;
>
> \(C\) assure that the home energy supplier will provide assurances
> that any agreement entered into with a home energy supplier under this
> paragraph will contain provisions to assure that no household
> receiving assistance under this title will be treated adversely
> because of such assistance under applicable provisions of State law or
> public regulatory requirements; and
>
> \(D\) ensure that the provision of vendored payments remains at the
> option of the State in consultation with local grantees and may be
> contingent on unregulated vendors taking appropriate measures to
> alleviate the energy burdens of eligible households, including
> providing for agreements between suppliers and individuals eligible
> for benefits under this Act that seek to reduce home energy costs,
> minimize the risks of home energy crisis, and encourage regular
> payments by individuals receiving financial assistance for home energy
> costs;

Many tribes pay LIHEAP benefits directly to vendors on behalf of
eligible households to make sure the money is used for energy bills. The
law requires that the tribe protect client households in their
relationships with vendors. The law states that the tribe must find ways
to do the following:

1.  Make sure the household knows how much assistance the vendor
    received as payment for the household\'s fuel. This means that some
    kind of notice about the vendor payment must be sent or given to the
    household.

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2.  Make sure that the vendor reduces the household's bill by the amount
    of its LIHEAP benefit and does not overcharge the household.

> [Example]{.underline} - The household\'s bill with the ABC Gas Company
> is \$500. The Tribe paid ABC Gas \$350 of LIHEAP funds towards the
> household\'s account. ABC Gas may not charge the household for that
> bill more than the balance of \$150.

3.  Make sure that the vendor does not treat LIHEAP households adversely
    or discriminate against LIHEAP households. This means, for example,
    that if the vendor allows other households to pay off their bills in
    installments, it should permit LIHEAP recipients to do the same.
    Vendors should not treat LIHEAP households adversely on delivery
    times, the price of fuel, or the amount of fuel the vendor will
    deliver at one time and should not require an additional deposit
    from LIHEAP customers. Nothing in the LIHEAP statute prohibits
    vendors from treating LIHEAP households more favorably than other
    households.

Likewise, any state moratorium laws should not adversely affect LIHEAP
households in comparison to other households. Moratoria are time periods
during the year, generally winter, when the utility company may not
shut-off a household\'s electricity or gas. Moratoria usually apply to
public utility companies that are controlled by state commissions or
other authorities.

To be sure that vendors agree to all of these requirements, most tribes
enter into an agreement with vendors before payments are made. Types of
agreements are listed on page D-26. Agreements are only the first part
of the requirement. The tribe must also find ways to ensure that vendors
comply with the agreements. Since dealing with vendors is a very
important part of most tribal LIHEAP programs, we have included a
separate section on vendors with more information on things you need to
consider, see page D-28.

**[Section 2605(b)(8) - Assurance #8 - Equitable
Treatment]{.underline}**

###### Provide assurances that\--

> \(A\) the State will not exclude households described in clause (2)(B)
> of this subsection from receiving home energy assistance benefits
> under clause (2), and
>
> \(B\) the State will treat owners and renters equitably under the
> program assisted under this title;

The first part of this assurance refers back to the eligibility criteria
listed in Assurance #2, Section 2605(b)(2). Under Assurance #2, the
eligibility for LIHEAP is limited to 150% of the poverty level, 60% of
the state median income, or eligibility in other federal programs listed
in Assurance #2. In Assurance #8, Tribes are directed to set an income
eligibility limit (up to 150% of the poverty level or 60 percent of the
state median income) and not to limit eligibility to only those who
receive benefits from the federal programs listed in Assurance #2.

The second part of this assurance states that owners and renters must be
treated equitably. In this section of the law, \"equitably\" does not
necessarily mean \"equally.\" The description in your plan may tell HHS
that renters and owners will be treated equally or differently. The
problem will be to deal with every

household so that the effect of LIHEAP is equitable for all of them.
Equitable means fair, given all of the factors that come into play.

There are three basic types of living arrangements:

-   The household owns or is buying its home.

-   The household rents its home and pays separately for energy costs.

-   The household rents its home and has its energy costs included in
    the rent payment.

The law requires the tribe to treat these three basic types of
households equitably or fairly. One important thing to consider is how
responsible the household is for payment of its own energy bills? Is the
household vulnerable to or responsible for the cost of heating and
cooling? For more on this, see page D-2, item 6.

**[Section 2605(b)(9) - Assurance #9 - Administrative
Costs]{.underline}**

> Provide that\--
>
> \(A\) The State may use for planning and administering the use of
> funds under this title an amount not to exceed 10 percent of the funds
> payable to such State under this title for a fiscal year; and
>
> \(B\) the State will pay from non-Federal sources the remaining costs
> of planning and administering the program assisted under this title
> and will not use Federal funds for such remaining cost (except for the
> costs of the activities described in paragraph (16);

Although the law limits the amount to be used by a grantee for planning
and administrative costs to 10 percent, regulations effective in FY 1988
allow a higher percentage for some grantees. Tribes, tribal
organizations and territories with allotments of \$20,000 or
[less]{.underline} may use up to 20% of the funds payable. Tribes,
tribal organizations and territories with allotments [over]{.underline}
\$20,000 may use up to 20% of the first \$20,000 (or \$4,000) plus 10%
of the remaining funds payable (what is left after the first \$20,000.)
If the amount expended on administration is more than what is allowable,
non-federal (tribal) funds must be used to pay the excess.

Administrative costs are not defined in the statute, but the final
regulations published July 6, 1982 provide some guidance. The preamble
to the regulations provides that, generally, administrative costs are
those costs necessary to administer the program whether they would be
considered direct or indirect costs under categorical grants. Section
96.30 of the regulations provides that tribes shall obligate and expend
LIHEAP funds in accordance with the laws and procedures for the
obligation and expenditure of their own funds.

An amendment to the final regulations dated October 13, 1987, Section
96.88, further clarifies the grantee\'s use of administrative costs:

> Any expenditure for governmental functions normally associated with
> administration of a public assistance program must be included in
> determining administrative costs subject to the statutory limitation
> on administrative costs, regardless of whether the expenditure is
> incurred by the state, a subrecipient, a grantee, or contractor of the
> state.

HHS has cautioned tribes to talk with their attorneys about whether
their definitions of what are and are not administrative costs, based
upon the tribe\'s standard accounting principles, are appropriate. HHS
will question a tribe\'s interpretation of administrative costs if it
appears to be erroneous. In addition, the tribe\'s auditor, the
Inspector General, or the General Accounting Office may not agree that
costs the tribe describes as administrative are, in fact,
administrative. If such funds are found to be expended erroneously, HHS
will require that they be repaid to the federal government.

Costs related to services provided by the tribe under Assurance #16 such
as budget counseling or assistance to clients with their energy vendors
are not counted within the administrative cap.

**[Section 2605(b)(10) - Assurance #10 - Fiscal Controls, Monitoring and
Audits]{.underline}**

> Provide that such fiscal control and fund accounting procedures will
> be established as may be necessary to assure the proper disbursal of
> and accounting for Federal funds paid to the State under this title,
> including procedures for monitoring the assistance provided under this
> title, and provide that the State will comply with the provisions of
> chapter 75 of title 31, United States Code (commonly known as the
> "Single Audit Act");

This section has three parts:

1.  fiscal control and fund accounting;

2.  monitoring of the program; and

3.  preparation of an audit.

Section 96.30 of the block grant final regulations provide that tribes
should obligate and expend funds in accordance with their own laws and
procedures. In addition, a tribe\'s fiscal control and fund accounting
procedures should be sufficient to permit reporting and the tracing of
funds to proper expenditures. Further information on financial
accounting can be found in Section I.

Monitoring of the program should include procedures to check elements of
program administration such as eligibility determination, calculating
benefit payments and payment systems. Financial monitoring should be
conducted to prevent waste, fraud and abuse. Further information on
monitoring can be found in Section H.

The Single Audit Act requires LIHEAP grantees to provide an audit each
year. See Section I for further information on audits.

**[Section 2605(b)(11) - Assurance #11 - Cooperation with
Investigations]{.underline}**

> Permit and cooperate with Federal investigations undertaken in
> accordance with section 2608;

This section means that the tribe agrees to make available for federal
officials files or other paperwork requested to help with an
investigation of its LIHEAP program. For an investigation, federal
officials may not ask the tribe to create any special paperwork or
reports or to compile information in any format other than what the
tribe already has available.

HHS may conduct an investigation if it receives a serious complaint
about the tribe\'s program. According to section 2608(a) of the law, for
a complaint to be considered serious, it would have to say that the
tribe was not spending LIHEAP funds in accordance with the law or its
plan. Other investigations, conducted by HHS and known as Program
Implementation Assessments (PIA), are conducted each year to see if
tribes (and states) are carrying out their programs according to the
law. These are planned even if no complaint has been made. HHS usually
conducts PIA's of about five LIHEAP grantees each year. The General
Accounting Office may also carry out investigations of tribal (or state)
programs to see if the programs are in compliance with the law.

If any of the investigations find that the tribe is not spending its
LIHEAP funds substantially in compliance with the law, HHS can withhold
funds from the tribe or seek repayment of funds. HHS must offer a
hearing to the tribe before it can seek repayment of funds or withhold
future funds.

**[Section 2605(b)(12) - Assurance #12 - Public
Participation]{.underline}**

> Provide for timely and meaningful public participation in the
> development of the plan described in subsection (c);

Public participation means that the members of the tribe, including
those who generally don\'t participate in tribal decisions, should be
given the opportunity to have a say in how the tribe will spend LIHEAP
funds. As many tribal members as possible should be given the
opportunity for meaningful input. The plan should be made available in a
timely manner for the public to read, review and provide comments before
being submitted to HHS. Public participation should also take place
before the plan is changed or amended significantly. The requirement to
allow for public participation has been an assurance since LIHEAP was
established in l982, but amendments to the statute enacted in l990 added
the requirement that the participation be \"timely and meaningful.\"

The law does not say how public participation should be carried out.
Some examples of how tribes have carried out their public participation
include:

-   community meetings

-   tribal council hearings

-   post notices that describe the plan and offer tribal members the
    opportunity to comment on it either in writing or in discussions
    with decision makers

The tribe must decide how extensive it will make public participation
and how it will seek input from its members. An opportunity for public
comment must be provided before your application will be considered
complete by HHS. This means an opportunity for public comment must be
provided prior to submitting the application to HHS. This gives the
tribe time to consider tribal members' opinions and make changes in the
application before it's submitted to HHS for review.

**[Section 2605(b)(13) - Assurance #13 - Fair Hearings]{.underline}**

> Provide an opportunity for a fair administrative hearing to
> individuals whose claims for assistance under the plan described in
> subsection (c) are denied or are not acted upon with reasonable
> promptness;
>
> The tribe must offer fair administrative hearings to all applicants to
> the program. The hearings are intended to give households the chance
> to explain why they believe they should receive LIHEAP assistance if:

(1) the tribe did not act upon the application quickly enough; or

(2) the application for assistance were unfairly denied.

**[Section 2605(b)(14) - Assurance #14 - Reporting]{.underline}**

> Cooperate with the Secretary with respect to data collecting and
> reporting under section 2610;

LIHEAP requires the collection and reporting of data on the number of
households it has served for each type of assistance the tribe offers.
Tribes must also report the amount the tribe will use for carryover and
the amount of funds available, if any, for reallotment. These reports
for the prior fiscal year must be submitted before a current LIHEAP
application is considered complete. Starting with FY 2000, tribes must
provide a financial statement on standard form 269-A ninety days after
the end of the fiscal year. See Section J for further details on
required reports.

**[Section 2605(b)(15) - Assurance #15 - Outreach and
Intake]{.underline}**

> Beginning in fiscal year 1992, provide, in addition to such services
> as may be offered by State Departments of Public Welfare at the local
> level, outreach and intake functions for crisis situations and heating
> and cooling assistance that is administered by additional State and
> local governmental entities or community-based organizations (such as
> community action agencies, area agencies on aging, and not-for profit
> neighborhood-based organizations), and in States where such
> organizations do not administer intake functions as of September 30,
> l991, preference in awarding grants or contracts for intake services
> shall be provided to those agencies that administer the low-income
> weatherization or energy crisis intervention programs;

Tribes and tribal organizations are not required to perform the
activities described in Assurance #15.

### **[Section 2605(b)(16) -- Assurance #16 -- 5% of Funds to assist low income households]{.underline}**

Use up to 5 percent of such funds, at its option, to provide services
that encourage and enable households to reduce their home energy needs
and thereby the need for energy assistance, including needs assessments,
counseling, and assistance with energy vendors, and report to the
Secretary concerning the impact of such activities on the number of
households served, the level of direct benefits provided to those
households, and the number of households that remain unserved.

This section allows tribes the option to use 5 percent of their funds to
help households in areas that are related to reducing energy bills. This
could include classes on energy conservation, help with developing and
following household budgets, and help with energy vendors.

##### Section 2605(c) and (d) - Plan Requirements

The following section of the statute describes what should be included
in a tribe's application.

> (c)(1) As part of the annual application required in subsection (a),
> the chief executive officer of each State shall prepare and furnish to
> the Secretary, in such format as the Secretary may require, a plan
> which\--

(A) describes the eligibility requirements to be used by the State for
    each type of assistance to be provided under this title, including
    criteria for designating an emergency under section 2604(c);

(B) describes the benefit levels to be used by the State for each type
    of assistance including assistance to be provided for emergency
    crisis intervention and for weatherization and other energy-related
    home repair;

(C) contains estimates of the amount of funds the State will use for
    each of the programs under such plan and describes the alternative
    use of funds reserved under section 2604(c) in the event any portion
    of the amount so reserved is not expended for emergencies;

(D) describes weatherization and other energy-related home repair the
    State will provide under subsection (k), including any steps the
    State will take to address the weatherization and energy-related
    home repair needs of households that have high home energy burdens,
    and describes any rules promulgated by the Department of Energy for
    administration of its Low Income Weatherization Assistance program
    which the State, to the extent permitted by the Secretary to
    increase consistency between federally assisted programs, will
    follow regarding the use of funds provided under this title by the
    State for such weatherization and energy-related home repairs and
    improvements;

(E) describes any steps that will be taken (in addition to those
    necessary to carry out the assurance contained in paragraph (5) of
    subsection (b)) to target assistance to households with high home
    energy burdens;

(F) describes how the State will carry out assurances in clauses (3),
    (4), (5), (6), (7), (8), (10), (12), (13) and (15) of subsection
    (b);

(G) states, with respect to the 12-month period specified by the
    Secretary, the number and income levels of households which apply
    and the number which are assisted with funds provided under this
    title, and the number of households so assisted with --

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(i) one or more members who had attained 60 years of age;

(ii) one or more numbers who were disabled, and

(iii) one or more young children, and

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(H) contains any other information determined by the Secretary to be
    appropriate for purposes of this title.

> The chief executive officer may revise any plan prepared under this
> paragraph and shall furnish the revised plan to the Secretary.
>
> (c)(2) Each plan prepared under paragraph (1) and each substantial
> revision thereof shall be made available for public inspection within
> the State involved in such a manner as will facilitate timely and
> meaningful review of, and comment upon, such plan or substantial
> revision.
>
> (c)(3) Not later than April 1 of each fiscal year the Secretary shall
> make available to the States a model State plan format that may be
> used, at the option of each State, to prepare the plan required under
> paragraph (1) for the next fiscal year.
>
> \(d\) The State shall expend funds in accordance with the State plan
> under this title or in accordance with revisions applicable to such
> plan

This section of the statute means that the tribe must submit a plan
which describes:

\(1\) Who is considered eligible for each type of assistance?

\(2\) What is considered an emergency?

\(3\) What are the benefit levels the tribe will provide for each type
of assistance?

> \(4\) What amount of LIHEAP funds does the tribe estimate will be used
> for each type of assistance provided by the LIHEAP program?
>
> \(5\) How will crisis funds be used after March 15^th^ if not expended
> on emergencies?

\(6\) What types of weatherization or energy-related home repair will
the tribe provide? What DOE rules will the tribe use, if any, when
operating a LIHEAP weatherization program?

\(7\) What criteria will be used to target households with high energy
burdens?

\(8\) How will the tribe carry out assurances 3, 4, 5, 6, 7, 8, 10, 12
and 13 for each type of assistance? (Tribes are not required to
implement assurance 15.)

> \(9\) Provide a Households Assisted Report for the previous fiscal
> year.

A tribe may revise its plan at any time. (Exception: Plan revisions to
include leveraged resources for the Leveraging Incentive Program must be
provided to HHS before the end of the fiscal year in which the resources
were provided to eligible households.) If the tribe makes substantial
changes to its plan, the tribe must provide the changes to the public in
a timely manner so that the public has time to review the changes and
make meaningful comments. Any changes made to the plan must be submitted
to HHS, but the tribe does not need approval from HHS to implement the
changes.

HHS will review the amendments and include them in the tribe\'s plan,
which is considered the official file of the tribe\'s program. It is
important to file amendments with HHS, since program assessments and
audits of the program refer to the official plan to determine whether
the program is being carried out correctly. The law requires the tribe
to expend funds according to its plan and revisions.

Amendments to the plan should be sent to the Director of the Division of
Energy Assistance, where the original application is sent.

HHS will provide a model plan each April for tribes to use, if they
choose, when applying for funds. The model plan is in Section E.

TRIBES MUST SUBMIT APPLICATIONS FOR DIRECT LIHEAP FUNDING BY [SEPTEMBER
1]{.underline}. HHS will review applications and will contact tribes if
additional information is needed. Additional information to complete the
plan must be submitted by December 15.

These deadlines were set by regulation because:

-   The funds that tribes receive come out of state allocations. Since
    the tribe has the option of deciding whether it will administer a
    program or not, the state may need to wait before considering the
    state\'s budget and service area until the tribe makes its decision.
    It would be unfair for states to have to plan for their program
    without knowing if they are responsible for serving tribes within
    the state or whether the tribes will be serving their own members.

-   The deadlines ensure that plans are completed in time for the winter
    heating season.

If a tribal application is submitted late (due September 1) or is not
completed by the deadline (December 15), HHS will only make funds
available to the tribe if the state or states in which the tribe or
tribal organization is located agree to later dates.

**[Section 2604(c) - Energy Crisis Intervention]{.underline}**

> Of the funds available to each State under subsection (a), a
> reasonable amount based on data from prior years shall be reserved
> until March 15 of each program year by each State for energy crisis
> intervention. The program for which funds are reserved by this
> subsection shall be administered by public or nonprofit entities which
> have experience in administering energy crisis programs under the
> Low-Income Energy Assistance Act of 1980, or under this Act,
> experience in assisting low-income individuals in the area to be
> served, the capacity to undertake a timely and effective energy crisis
> intervention program, and the ability to carry out the program in
> local communities. The program for which funds are reserved under this
> subsection shall\--
>
> \(1\) not later than 48 hours after a household applies for energy
> crisis benefits, provide some form of assistance that will resolve the
> energy crisis if such household is eligible to receive such benefits;
>
> \(2\) not later than 18 hours after a household applies for crisis
> benefits, provide some form of assistance that will resolve the energy
> crisis if such household is eligible to receive such benefits and is
> in a life-threatening situation; and

(3) require each entity that administers such program-

> \(A\) to accept applications for energy crisis benefits at sites that
> are geographically accessible to all households in the area to be
> served by such entity; and
>
> \(B\) to provide to low-income individuals who are physically infirm
> the means\--
>
> \(i\) to submit applications for energy crisis benefits without
> leaving their residences; or
>
> \(ii\) to travel to the sites at which such applications are accepted
> by such entity.
>
> The preceding sentence shall not apply to a program in a geographical
> area affected by a natural disaster in the United States designated by
> the Secretary, or by a major disaster or emergency designated by the
> President under the Disaster Relief Act of 1974, for so long as such
> designation remains in effect, if the Secretary determines that such
> disaster or such emergency makes compliance with such sentence
> impracticable.

The statute requires the tribe to designate an amount to be set aside
for crisis intervention assistance until March 15 of each year. The law
does not prescribe how much money must be set aside until March 15, but
the tribe should decide based upon its experience from past years. Some
tribes have decided that a small amount is sufficient, while others have
set aside major portions of their allotments for the crisis assistance
program. Congress included the March 15th date to ensure, to the extent
possible, the availability of funds for crisis situations throughout the
winter heating season.

Some form of assistance that will resolve the energy crisis must be
provided within 48 hours after an eligible household applies for crisis
benefits or within 18 hours if the household is in a life-threatening
situation. It is left up to the tribe to determine what kind of
assistance will be provided and what situations the tribe considers to
be life-threatening. To comply with this requirement, most tribes have
negotiated with local vendors to provide service to meet the required
time-frames after the tribal LIHEAP coordinator telephones the
authorized benefit amount to the vendor.

In addition, tribes should provide applications for crisis assistance in
areas accessible to the population to be served. Those low-income
individuals who are physically infirm should have the opportunity to
submit applications from their homes or be provided transportation to
application intake sites.

When a tribe is considering the size of its service area prior to
applying for direct funding, it should keep these requirements in mind.
For example, if two-thirds of a non-reservation tribe's members are in
one county and the rest are scattered around the state, the tribe
probably should limit its service area to the county where most of its
members live.

The above mentioned time frames and availability of applications do not
apply if the Secretary determines that a natural disaster or emergency
makes compliance impractical. The block grant regulations in Section
96.89 (see Appendix II) describe how grantees may apply for exemption
from these standards during a natural disaster or emergency.

**[Section 2605(k) - Weatherization]{.underline}**

> \(1\) Except as provided in paragraph (2), not more than 15 percent of
> the greater of\--
>
> \(A\) the funds allotted to a State under this title for any fiscal
> year; or
>
> \(B\) the funds available to such State under this title for such
> fiscal year;
>
> may be used by the State for low-cost residential weatherization or
> other energy-related home repair for low-income households
> particularly those low-income households with the lowest incomes that
> pay a high proportion of household income for home energy.
>
> (2)(A) If a State receives a waiver granted under subparagraph (B) for
> a fiscal year, the State may use not more than the greater of 25
> percent of---
>
> \(i\) The funds allotted to a State under this title for such fiscal
> year; or

(ii) the funds available to such State under this title for such fiscal
     year;

> for residential weatherization or other energy-related home repair for
> low-income households, particularly those low-income households with
> the lowest incomes that pay a high proportion of household income for
> home energy.

\(B\) For purposes of subparagraph (A), the Secretary may grant a waiver
to a State for a fiscal year if the State submits a written request to
the Secretary after March 31 of such fiscal year and if the Secretary
determines, after reviewing such request and any public comments,
that\--

> (i)(I) the number of households in the State that will receive
> benefits, other than weatherization and energy-related home repair,
> under this title in such fiscal year will not be fewer than the number
> of households in the State that received benefits, other than
> weatherization and energy-related home repair, under this title in the
> preceding fiscal year;
>
> \(II\) the aggregate amounts of benefits that will be received under
> this title by all households in the State in such fiscal year will not
> be less than the aggregate amount of such benefits that were received
> under this title by all households in the State in the preceding
> fiscal year; and
>
> \(III\) such weatherization activities have been demonstrated to
> produce measurable savings in energy expenditures by low-income
> households; or
>
> \(ii\) in accordance with rules issued by the Secretary, the State
> demonstrates good cause for failing to satisfy the requirements
> specified in clause (i).

The tribe may set aside up to 15 percent of its funds each year for
low-cost weatherization or other energy-related home repair. Tribes may
ask for a waiver of the 15 percent limit by submitting to HHS a written
request after March 31 to increase funds for weatherization, up to 25
percent. HHS must determine that certain conditions are met before the
increase for weatherization is granted. Information needed for a waiver
request starts on page D-36.

The tribe may decide to set up a separate weatherization program or may
use LIHEAP funds in conjunction with a Department of Energy (DOE)
Weatherization Assistance Program. The tribe may choose to use all, some
or none of the DOE Weatherization program rules to run its
weatherization program. However, only a few tribes operate their own DOE
programs, so most tribe's either don't operate a weatherization program
at all, or offer specific services most needed by their members.

**[Section 2602(e) -- Contingency Funding]{.underline}**

There is authorized to be appropriated in each fiscal year for payments
under this title, in addition to amounts appropriated for distribution
to all the states in accordance with section 2604 (other than subsection
(e) of such section), \$600,000,000 to meet the additional home energy
assistance needs of one or more States arising from a natural disaster
or other emergency. Funds appropriated pursuant to this subsection are
hereby designated to be emergency requirements pursuant to section
251(b)(2)(D) of the Balance Budget and Emergency Deficit Control Act of
1985, except that such funds shall be made available only after the
submission to Congress of a formal budget request by the President (for
all or a part of the appropriation pursuant to this subsection) that
includes a designation of the amount requested as an emergency
requirement as defined in such Act.

The President may request emergency funds from Congress up to \$600
million to assist a state or states that are experiencing a natural
disaster or other emergency. Generally, when that happens, tribes
receive the same percentage of contingency funds that they receive from
the state's gross allotment of regular LIHEAP funds.

**[Section 2605(b) - Waste, Fraud and Abuse]{.underline}**

> The Secretary shall issue regulations to prevent waste, fraud, and
> abuse in the programs assisted by this title.

HHS included in its block grant regulations a requirement that grantees
must establish systems and procedures to prevent, detect and correct
waste, fraud and abuse in LIHEAP. These systems and procedures should
address possible waste, fraud and abuse by recipients, vendors and
administering agencies. HHS will monitor grantees for implementation of
this requirement during reviews of grantee programs.

#### 

#### **Section 2605(f)(1)-- LIHEAP Benefits Not Income**

Notwithstanding any other provision of law unless enacted in express
limitation of this paragraph, the amount of any home energy assistance
payments or allowances provided directly to, or indirectly for the
benefit of, an eligible household under this title shall not be
considered income or resources of such household (or any member thereof)
for any purpose under any Federal or State law, including any law
relating to taxation, food stamps, public assistance, or welfare
programs.

LIHEAP benefits cannot be treated as income or resources when computing
a household's income for federal or state programs. This means that a
household receiving a LIHEAP benefit may not lose its eligibility for
another assistance program or have its benefit reduced based on receipt
of the LIHEAP benefit.

**[Section 2606(a) - Nondiscrimination]{.underline}**

> No person shall on the ground of race, color, national origin, or sex
> be excluded from participation in, be denied the benefits of, or be
> subjected to discrimination under, any program or activity funded in
> whole or in part with funds made available under this title. Any
> prohibition against discrimination on the basis of age under the Age
> Discrimination Act of 1975 or with respect to an otherwise qualified
> handicapped individual as provided in section 504 of the
> Rehabilitation Act of 1973 also shall apply to any such program or
> activity.

This section prohibits discrimination. The prohibition against
discrimination means that race, color, national origin, age, sex or
handicap may not be used as eligibility criteria to exclude someone from
LIHEAP.

Tribes would not be discriminating if they serve only their eligible
tribal households. The LIHEAP law provides that tribal LIHEAP allotments
are based in part on the tribe\'s eligible Indian population. The
tribe\'s allotment, therefore, does not include funds for non-Indians
unless a tribe/state agreement increases funds to the tribe to be used
for non-Indians. Non-Indians are to be served by the state LIHEAP
program [UNLESS]{.underline} the tribe and the state have an agreement
that allows or requires non-Indians to be served by the tribe. However,
in most cases, a tribe must serve all Indians in its service area, not
just its own tribal members.

Reports of discrimination are investigated by HHS or the Justice
Department. Violation of the law against discrimination is a federal
crime.

#### **Section 2609 -- Limitation on Use of Grants for Construction**

Grants made under this title may not be used by the State, or by any
other person with which the state makes arrangements to carry out the
purposes of this title, for the purchase or improvement of land, or the
purchase, construction, or permanent improvement (other than low-cost
residential weatherization or other energy-related home repairs) of any
building or other facility.

Tribes cannot purchase or improve land, or purchase, construct or
improve buildings. This means LIHEAP funds cannot be used to buy or
build office facilities or homes for low-income households. (Tribes can
provide [low-cost]{.underline} weatherization and home repair.)

**[Section 2607(A) -- Leveraging Incentive Program]{.underline}**

> \(a\) Beginning in fiscal year 1992, the Secretary may allocate
> amounts appropriated under section 2602(d) to provide supplementary
> funds to States that have acquired non-Federal leveraged resources for
> the program established under this title.
>
> \(b\) For purposes of this section, the term \"leveraged resources\"
> means the benefits made available to the low-income home energy
> assistance program of the State, or to federally qualified low-income
> households, that\--
>
> \(1\) represent a net addition to the total energy resources available
> to State and federally qualified households in excess of the amount of
> such resources that could be acquired by such households through the
> purchase of energy at commonly available household rates; and
>
> (2)(A) result from the acquisition or development by the State program
> of quantifiable benefits that are obtained from energy vendors through
> negotiation, regulation or competitive bid; or
>
> \(B\) are appropriated or mandated by the State for distribution\--
>
> \(i\) through the State program; or
>
> \(ii\) under the plan referred to in section 2605(c)(1)(A) to
> federally qualified low-income households and such benefits are
> determined by the Secretary to be integrated with the State program.
>
> (c)(1) Distribution of amounts made available under this section shall
> be based on a formula developed by the Secretary that is designed to
> take into account the success in leveraging existing appropriations in
> the preceding fiscal year as measured under subsection (d). Such
> formula shall take into account the size of the allocation of the
> State under this title and the ratio of leveraged resources to such
> allocation.
>
> (c)(2) A state may expend funds allocated under this title as are
> necessary, not to exceed .08 percent of such allocation or \$35,000
> each fiscal year, whichever is greater, to identify, develop, and
> demonstrate leveraging programs. Funds allocated under this section
> shall only be used for increasing or maintaining benefits to
> households.
>
> \(d\) Each State shall quantify the dollar value of leveraged
> resources received or acquired by such State under this section by
> using the best available data to calculate such leveraged resources
> less the sum of any costs incurred by the State to leverage such
> resources and any cost imposed on the federally eligible low-income
> households in such State.
>
> \(e\) Not later than 2 months after the close of the fiscal year
> during which the State provided leveraged resources to eligible
> households, as described in subsection (b), each State shall prepare
> and submit to the Secretary, a report that quantifies the leveraged
> resources of such State in order to qualify for assistance under this
> section for the following fiscal year.
>
> \(f\) The Secretary shall determine the share of each State of the
> amounts made available under this section based on the formula
> described in subsection (c) and the State reports. The Secretary shall
> promulgate regulations for the calculation of the leveraged resources
> of the State and for the submission of supporting documentation. The
> Secretary may request any documentation that the Secretary determines
> necessary for the verification of the application of the State for
> assistance under this section.

HHS will issue additional LIHEAP funds as an incentive award to those
grantees that leverage non-federal resources that increase energy
benefits for LIHEAP-eligible recipients. These non-federal resources are
considered \"leveraged\" resources. Some examples of leveraged resources
are tribal funds added to the tribe's LIHEAP program, discounted fuel
prices negotiated with the energy vendor by the tribe, and waivers of
utility connection or reconnection fees for LIHEAP-eligible recipients.

Grantees who want to participate in the Leveraging Incentive Program
must submit to HHS by November 30 a report that describes the amounts
and types of leveraged resources provided in the previous fiscal year,
minus any funds used by the grantee to leverage resources or minus any
costs to low income households. Tribes are allowed to spend some of
their regular LIHEAP grant to identify, develop, and demonstrate
leveraging programs. Block grant regulations limit the amount tribes may
use for these activities to the greater of 2 percent of the tribe's
allotment or \$100.

HHS will use the accepted amounts of leveraged resources submitted in
grantee leveraging reports in a formula to determine the amount of a
tribe's incentive award. See Section K for more information on the
Leveraging Incentive Program.

**[Section 2607B - Residential Energy Assistance Challenge Option
(REACH)]{.underline}**

(a) Purpose---The purpose of the Residential Energy Assistance Challenge
    (in this section referred to as "R.E.A.Ch.") program is

to --

(1) minimize health and safety risks that result from high energy
    burdens on low-income Americans;

(2) prevent homelessness as a result of inability to pay energy bills;

(3) increase the efficiency of energy usage by low-income families; and

(4) target energy assistance to individuals who are most in need.

The REACH program is a competitive grant program that LIHEAP grantees
can apply for. At the tribe's option, the tribe can design a project to
assist its low-income population with energy needs and submit its
proposal to HHS. HHS will review the proposals and choose the best
projects to fund. Usually 4 - 6 states and 4 - 6 tribes receive REACH
funds each year. This program is funded through LIHEAP. More information
on this program is in Section L.

**[Section 2609A -- Technical Assistance, Training, and Compliance
Reviews]{.underline}**

(a) Of the amounts appropriated under section 2602(b) for any fiscal
    year, not more than \$300,000 of such amounts may be reserved by the
    Secretary --

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(1) to --

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(A) make grants to state and public agencies and private nonprofit
    organizations ; or

(B) enter into contracts or jointly financed cooperative arrangements or
    interagency agreements with States and public agencies (including
    Federal agencies) and private nonprofit organizations;

> to provide for training and technical assistance related to the
> purposes of this subtitle, including collection and dissemination of
> information about programs and projects assisted under this subtitle,
> and ongoing matters of regional or national significance that the
> Secretary finds would assist in the more effective provision of
> services under this title; or

(2) to conduct onsite compliance reviews of programs supported under
    this title.

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(b) No provision of this section shall be construed to prevent the
    Secretary from making a grant pursuant to subsection (a) to one or
    more private nonprofit organizations that apply jointly with a
    business concern to receive such grant.

This section of the law allows HHS to use up to \$300,000 to make
grants, contracts, cooperative arrangements or interagency agreements to
provide training and technical assistance (T&TA) and to conduct
compliance reviews of LIHEAP programs. Organizations that may apply for
and receive these funds are states, tribes, territories, private
nonprofit organizations, and partnerships with private nonprofits
organizations and for-profit businesses. Federal agencies can also
receive these funds.

Some projects currently funded by T&TA funds are the LIHEAP
Clearinghouse and LIHEAP workshops. Additionally, funds are used in
interagency agreements with the U.S. Census Bureau to provide data on
low-income households for allocation purposes of LIHEAP funds and with
the Department of Energy for energy data. T&TA funds are also used by
HHS to support the on-site compliance reviews and assessments of LIHEAP
programs.

**[Section 2602(c) -- Forward Funding]{.underline}**

Amounts appropriated under this section for any fiscal year for programs
and activities under this title shall be made available for obligation
in the succeeding fiscal year.

Congress provides funds for LIHEAP on a yearly basis, and in the past,
funds were not available for LIHEAP until November or December. To make
sure funds will be available at the beginning of the heating season, the
law provides that Congress will have funds appropriated for LIHEAP in
the year before they are to be awarded. This makes sure that funds are
available on October 1 for those tribes who have submitted a complete
LIHEAP application. In recent years, however, Congress does not provide
forward funding for LIHEAP.

**[Section 2605(b) -- Model Performance Goals]{.underline}**

Not later than 18 months after the date of the enactment of the
Low-Income Home Energy Assistance Amendments of l994, the Secretary
shall develop model performance goals and measurements in consultation
with State, territorial, tribal, and local grantees, that the States may
use to assess the success of the States in achieving the purposes of
this title. The model performance goals and measurements shall be made
available to States to be incorporated, at the option of the State, into
the plans for fiscal year 1997. The Secretary may request data relevant
to the development of model performance goals and measurements.

HHS is currently working with grantees to establish model performance
goals. Grantees will be able to use these goals to assess the success of
their LIHEAP programs and to report these successes to HHS. Grantees
will be notified through Information Memorandums (IM) and Action
Transmittals (AT) of HHS's progress and final results of this ongoing
effort.

**[Section 2607 --Carryover and Reallotment]{.underline}**

(a)(2) Each State shall notify the Secretary, not later than 2 months
prior to the close of a fiscal year, of the amount (if any) of its
allotment for such year that will not be obligated in such year, and, if
such State elects to submit a request described in subsection (b)(2),
such State shall submit such request at the same time. The Secretary
shall make no payment under paragraph (1) to a State for a fiscal year
unless the State has complied with this paragraph with respect to the
prior fiscal year.

> (b)(1) If --

(A) the Secretary determines that, as of September 1 of any fiscal year,
    an amount allotted to a State under section 2604 for any fiscal year
    will not be used by such State during such fiscal year;

(B) the Secretary---

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(i) notifies the chief executive officer of such State; and

(ii) publishes a timely notice in the Federal Register; that, after the
     30-day period beginning on the date of the notice to such chief
     executive officer, such amount may be reallotted; and

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(C) the State does not request, under paragraph (2), that such amount be
    held available for such State for the following fiscal year;

then such amount shall be treated by the Secretary for purposes of this
title as an amount appropriated for the following fiscal year to be
allotted under section 2604 for such following fiscal year.

> (b)(2)(A) Any State may request that an amount allotted to such State
> for a fiscal year be held available for such State for the following
> fiscal year. Such request shall include a statement of the reasons
> that the amount allotted to such State for a fiscal year will not be
> used by such State during such fiscal year and a description of the
> types of assistance to be provided with the amount held available for
> the following fiscal year. Any amount so held available for the
> following fiscal year shall not be taken into account in computing the
> allotment of or the amount payable to such State for such fiscal year
> under this title.
>
> \(B\) No amount may be held available under this paragraph for a State
> from a prior fiscal year to the extent such amount exceeds 10 percent
> of the amount payable to such State for such prior fiscal year. For
> purposes of the preceding sentence, the amount payable to a State for
> a fiscal year shall be determined without regard to any amount held
> available under this paragraph for such State for such fiscal year
> from the prior fiscal year.
>
> \(C\) The Secretary shall reallot amounts made available under this
> paragraph for the fiscal year following the fiscal year of original
> allotment in accordance with paragraph (1) of this subsection.

A tribe must report to HHS by August 1 the amount of funds it will [not
obligate]{.underline} for the fiscal year (reallotment funds) and the
amount of funds (not to exceed 10% of funds payable) the tribe may want
to carry over into the next fiscal year (carryover funds).

[Reallotment Funds]{.underline} - If a tribe has obligated all the
LIHEAP funds it can for the current fiscal year, plans to carry over 10
percent of funds payable, and still has LIHEAP funds it cannot use, then
those funds must be returned to the federal government. The unused funds
returned to HHS are put into a pool of funds to be reallotted to
grantees during the next year. The tribe must notify HHS of the unused
amount available for reallotment in the tribe\'s Carryover and
Reallotment Report due August 1. If a tribe finds that it has more than
10% unobligated near the end of the fiscal year, it should consider
whether there are unmet needs for the unused funds. Some tribes use
money left over at the end of the year to buy fuel for the next winter,
replace unsafe furnaces, or make supplemental benefit payments. If funds
still cannot be used by the tribe, it may want to return unused funds to
the state for its use. To return funds to the state, contact HHS.

[Carryover Funds]{.underline} - A tribe may decide to hold some of its
funds awarded in one fiscal year for use in the following fiscal year.
The maximum amount that may be held, or carried over, is 10 percent of
funds payable in a fiscal year. Carryover does not penalize the tribe
when allotments are calculated for the following year. Carrying funds
over may make it possible to begin the program earlier in the year
because funds will already be on hand.

Block grant regulations in section 96.81 (see Appendix II) require
grantees to report the amount of carryover funds and funds available for
reallotment to HHS by August 1 in the tribe's Carryover and Reallotment
Report. The report must also include the reason the funds cannot be
expended in the year they are allotted, and a description of the types
of assistance to be provided with these funds in the following fiscal
year. If there are no funds to carry over or no funds available for
reallotment, the tribe needs to report that also.

LIHEAP funds for a fiscal year will not be granted until HHS receives
the tribe's Carryover and Reallotment Report for the previous fiscal
year.

**[Section 2610 - Reports]{.underline}**

> \(a\) The Secretary, after consultation with the Secretary of Energy,
> shall provide for the collection of data, including\--
>
> \(1\) information concerning home energy consumption;
>
> \(2\) the amount, cost and type of fuels used for households eligible
> for assistance under this title;
>
> \(3\) the type of fuel used by various income groups;
>
> \(4\) the number and income levels of households assisted by this
> title;
>
> \(5\) the number of households which received such assistance and
> include one or more individuals who are 60 years or older or disabled
> or include young children; and
>
> \(6\) any other information which the Secretary determines to be
> reasonably necessary to carry out the provisions of this title.
>
> Nothing in this subsection may be construed to require the Secretary
> to collect data which has been collected and made available to the
> Secretary by any other agency of the Federal Government.
>
> \(b\) The Secretary shall, no later than June 30 of each fiscal year,
> submit a report to the Congress containing a detailed compilation of
> the data under subsection (a) with respect to the prior fiscal year,
> and a report that describes for the prior fiscal year \--
>
> \(1\) the manner in which States carry out the requirements of clauses
> (2), (5), (8) and (15) of section 2605(b); and

(2) the impact of each State\'s program on recipient and eligible
    households.

HHS will compile data from grantee reports for the annual report to
Congress. Under the law and regulations, grantee\'s are required to
submit the following reports on its use of funds:

1.  [Carryover and Reallotment Report]{.underline} must be submitted by
    August 1 of each year. This report contains information about how
    much money the tribe wishes to carryover for the next fiscal year,
    the reason that this amount will not be used in the fiscal year it
    was allotted, and the types of assistance to be provided with these
    funds. This report also includes the amount of funds, if any, the
    tribe will not use either in its current year program or in its
    carryover but will be returned to the federal government for
    reallotment. This report must be submitted for the previous fiscal
    year before funds for a new fiscal year can be awarded to your
    tribe.

2.  [Report on Households Assisted]{.underline} in the previous fiscal
    year is due before funds for the current fiscal year will be issued.
    Most tribal grantees submit the report with their application for
    LIHEAP funding due September 1. This report requires the tribe to
    provide the number of households assisted by LIHEAP funds for each
    LIHEAP component offered by the tribe in the previous fiscal year.
    (Tribes are exempt from more extensive household data reporting that
    is required of states.)

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3.  [Leveraging Report]{.underline} is due November 30 for resources
    leveraged in the previous fiscal year. It is the
    [option]{.underline} of the tribe to participate in the Leveraging
    Incentive Program. Through this program, tribes may receive
    additional LIHEAP funds as an incentive award for providing
    non-federal resources and benefits to LIHEAP-eligible clients. Any
    plan amendments to include leveraged resources must be submitted to
    HHS by September 30. A further description of this program can be
    found in Section K.

4.  [Standard Form 269A- Financial Status Report]{.underline} is due 90
    days after the end of the fiscal year and contains information on
    the obligation of LIHEAP funds. (This is a new report requirement
    starting with the FY 2000 LIHEAP program.)

Further detailed information on these reports is found in Section J.