Low Income Home Energy Assistance Program (LIHEAP): Estimated Allocations
Released: 2008-06-26T00:00:00

Low Income Home Energy Assistance Program

The Low Income Home Energy Assistance Program (LIHEAP) is a block grant program under which the federal government gives annual grants to states, the District of Columbia, U.S. territories and commonwealths, and Indian tribal organizations to operate multi-component home energy assistance programs for needy households. Established in 1981 by Title XXVI of the Omnibus Budget Reconciliation Act ( P.L. 97-35 ), LIHEAP has been reauthorized and amended several times, most recently in 2005, when the Energy Policy Act ( P.L. 109-58 ) reauthorized annual regular LIHEAP funds at $5.1 billion per year from FY2005 to FY2007. The total LIHEAP appropriation in the FY2008 Consolidated Appropriations Act ( P.L. 110-161 ) was approximately $2.57 billion. In FY2007 Congress appropriated $2.16 billion for the program ( P.L. 110-5 ), and in FY2006, $3.161 billion was appropriated for LIHEAP ( P.L. 109-149 and P.L. 109-204 ), the largest amount ever appropriated for the program.

The LIHEAP statute provides for two types of program funding: regular funds and contingency funds. This report focuses on the distribution of regular funds, sometimes referred to as block grant funds, which are allotted to states according to methods prescribed by the LIHEAP statute. The allotment method may change depending on the amount of funds appropriated by Congress. In both FY2007 and FY2008, $1.98 billion was allocated to regular funds, and in FY2006, $2.48 billion of the LIHEAP appropriation was distributed as regular funds. The second type of LIHEAP funding, called contingency funds, may be released and allotted to one or more states at the discretion of the President and the Secretary of Health and Human Services (HHS). The contingency funds may be released at any point in the fiscal year to meet additional home energy assistance needs created by a natural disaster or other emergency. Of the total appropriated for LIHEAP in FY2008, approximately $590 million was for contingency funds.

LIHEAP Block Grant Funding Levels

In the FY2008 Consolidated Appropriations Act ( P.L. 110-161 ), Congress appropriated $1.98 billion for the LIHEAP regular fund. P.L. 110-161 contained an across-the-board rescission of 1.747% that reduced the stated amounts appropriated for most Departments of Labor, Health and Human Services, and Education programs. The $1.98 billion appropriation for regular funds is the amount available after this rescission. The first distribution to the states of the regular funds appropriated in P.L. 110-161 occurred in December 2007. Then, on June 26, 2008, HHS announced that it would distribute funds that were thought to have been allocated to leveraging incentive and REACH grants in the FY2008 Appropriations Act as part of the regular fund formula grants. Since the early 1990s, leveraging incentive and REACH grants have been made to states and tribes on the basis of their ability to obtain non-LIHEAP resources for energy assistance (leveraging incentive grants) and for increasing energy efficiency of low-income households (REACH grants). In recent years, Congress has allocated around $27 million for these two funds. However, in FY2008, P.L. 110-161 did not appropriate funds for leveraging incentive and REACH grants. When HHS discovered that language to appropriate the funds was missing from the law, it released the $26.7 million that would otherwise have been distributed as leveraging incentive and REACH grants as part of the LIHEAP formula distribution. The addition of nearly $27 million to the formula grants caused the funds to be released under the "new" LIHEAP formula. For more information about how the LIHEAP formula distributes funds, see CRS Report RL33275, The LIHEAP Formula: Legislative History and Current Law , by [author name scrubbed].

Column (c) of Table 1 shows the amount of funds that were initially allocated to the states in FY2008 before HHS discovered that the leveraging incentive grants had not been appropriated in P.L. 110-161 . Column (d) shows the total distributed to the states on June 26, 2008, which includes the $26.7 million in leveraging incentive grants. Column (b) of Table 1 shows the amounts allocated to the states in FY2007. For FY2009, the President has requested a total of $2 billion for LIHEAP; of this amount, $1.7 billion would be allocated to regular funds. Column (e) of Table 1 shows estimated allocations to the states at an appropriation of $1.7 billion. Column (a) shows the amount allotted to each state in FY2006, when $2.48 billion was appropriated for LIHEAP regular funds.

Following Table 1 , Table 2 shows estimated allocations to the states at various hypothetical appropriations levels. These amounts are $1.75 billion, $2.0 billion, $2.25 billion, $2.5 billion, $2.75 billion, $3.0 billion, $4.0 billion, and $5.1 billion (the amount at which LIHEAP regular funds were last authorized in P.L. 109-58 ).