LIHEAP: Program and Funding
Released: 2018-06-22T00:00:00

Introduction

The Low Income Home Energy Assistance program (LIHEAP), established by Title XXVI of the Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ), is a program through which the federal government gives states, tribes, and territories annual grants to operate home energy assistance programs for low-income households. The LIHEAP statute provides for two primary types of program funding: regular funds (sometimes referred to as block grant or formula funds) and emergency contingency funds. Regular funds are allotted to states according to a formula prescribed by the LIHEAP statute. Emergency 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 first section of this report discusses LIHEAP program rules and benefits, including household eligibility and how funds may be used, and presents the most recent data available from HHS regarding household characteristics and benefit levels (see " Program Rules and Benefits "). The second section of this report discusses each category of LIHEAP funds and how they are distributed to states, tribes, and territories (see " Types of LIHEAP Funds "). The third section discusses LIHEAP funding and appropriations (see " LIHEAP Appropriations "). Appendix A describes the legislative history of energy assistance, leading up to and including the enactment of LIHEAP (see " Legislative History of Energy Assistance "). Finally, Appendix B contains tables showing recent LIHEAP allocations to the states, as well as appropriations for the program since its inception.

Program Rules and Benefits

Federal LIHEAP requirements are minimal and leave most important program decisions to the states, the District of Columbia, the territories, and Indian tribes and tribal organizations that receive federal funds (collectively referred to in this report as "grantees"). The law governing LIHEAP sets up most requirements as part of a list of "assurances" that grantees must make when they apply to HHS for funds. For example, grantees must make assurances about the sorts of energy assistance they will provide, who will be served, and how funds will be administered. The LIHEAP statute contains 16 assurances that govern various aspects of how the program operates at the state, tribe, or territorial level. This section discusses how grantees implement the assurances to provide energy assistance to low-income households.

How May LIHEAP Funds Be Used?

The LIHEAP statute outlines the ways in which grantees may use funds.

Funds may be used to help households meet their home energy costs by making payments for heating and cooling expenses . All state grantees provide heating assistance to households, while a smaller number provide cooling assistance. See Table 1 . States must reserve funds to assist when households face an energy crisis , defined as "weather-related and supply shortage emergencies and other household energy-related emergencies." Within this definition, states determine the circumstances under which they will provide assistance. For example, generally states provide crisis assistance to households that are in danger of losing their heating or cooling due to problems with equipment, receipt of a utility shutoff notice, or exhaustion of a fuel supply. Funds may be used for low-cost weatherization projects. Grantees are limited to using 15% of their allotment for weatherization unless a grantee has a waiver from HHS for up to 25%. Grantees may use funds to provide services to reduce the need for energy assistance (e.g., needs assessment, counseling on how to reduce energy consumption) limited to 5% of the allotment. Funds may be used for program administration , limited to 10% of the allotment.

See Table 1 for more information about the ways in which states use their LIHEAP funds.

Who May Receive Assistance?

Basic Eligibility: Federal law sets out parameters that grantees must follow in establishing eligibility for LIHEAP assistance. The statute establishes households as the unit that is eligible for LIHEAP assistance (versus a family). A household consists of an "individual or group of individuals who are living together as one economic unit for whom residential energy is customarily purchased in common or who make undesignated payments for energy in the form of rent." Grantees must have a system in place for a household denied assistance to appeal.

Eligibility Based on Income: Grantees have the option of setting LIHEAP eligibility for households at or below 150% of the federal poverty income guidelines or, if greater, 60% of the state median income. States may adopt lower income limits, but no household with income below 110% of the poverty guidelines may be considered ineligible. Eligibility Based on Receipt of Other Benefits: Grantees may separately choose to make eligible for LIHEAP assistance any household of which at least one member is a recipient of Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), benefits under the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps), or certain needs-tested veterans' programs.

The LIHEAP statute does not impose an asset test in establishing eligibility, but states may choose to limit client assets. LIHEAP assistance does not reduce eligibility or benefits under other state or federal aid programs. For example, this means that a LIHEAP payment would not count toward the income or resources of a family applying for SNAP, housing assistance, or other types of assistance programs. Each year, the LIHEAP Clearinghouse, through a contract with HHS, makes available state eligibility guidelines on its website.

Vulnerable and High-Need Populations: The LIHEAP statute requires that grantees conduct outreach to eligible households, "especially" households with elderly individuals, individuals with disabilities, or that have high energy burdens (home energy expenditures divided by income), to ensure that they are aware of LIHEAP availability.

Grantees must further ensure that households with the lowest incomes, together with the highest home energy need in relation to income, receive the highest level of assistance. This provision was added to the law as part of the Human Services Amendments of 1994 ( P.L. 103-252 ) with the intention of ensuring that both income and energy burden together were considered so that grantees would target households that are "most drastically burdened" and who have the "highest health risk."

Owners and Renters: Under the LIHEAP statute, grantees must treat owners and renters "equitably." The way in which renters pay utilities may differ from homeowners, where, in some cases, payments for heating and cooling are included in rent rather than paid directly by the tenant. However, this should not affect eligibility for LIHEAP.

In addition, the issue of how to treat renters living in housing subsidized through the Department of Housing and Urban Development (HUD) has been raised in the past. In general, HUD housing subsidies are based both on rent levels and reasonable utility expenses. Tenants pay approximately 30% of their income toward the total rent and utility costs, and HUD subsidizes the remainder of the total. In cases where tenants pay their utilities directly (rather than as part of their rent), they are reimbursed for the HUD share of utilities through a utility allowance, which generally comes in the form of a rent reduction. In 1992, Congress enacted legislation to make clear that states may not automatically deny LIHEAP benefits to subsidized tenants who pay their utilities directly and receive utility allowances. However, states may take utility allowances into account when determining the amount of benefits subsidized renters may receive. On its website, the LIHEAP Clearinghouse compiles state policies regarding renters.

How Is LIHEAP Administered?

Federal rules allow grantees to decide the mix and dollar range of benefits, choose how benefits are provided (e.g., to utilities or directly to households), and decide which agencies will administer the program. Grantees provide details to HHS about program operation via a state plan submitted each year, and they are to provide a method for public participation in the state plan's development.

The state agency administering LIHEAP is to coordinate with other low-income programs, including the Department of Energy's Weatherization Assistance Program (WAP). To the extent possible, grantees are encouraged to follow WAP rules in order to increase consistency between the two weatherization components. LIHEAP grantees are also required to establish fiscal control and accounting procedures, which include a way of monitoring the assistance that is provided.

At the state level, many LIHEAP administrative functions such as intake and application processing are often delegated to local level agencies. In the early years of energy assistance, prior to the existence of LIHEAP, funds were administered by local Community Action Agencies (CAAs). This relationship continued when LIHEAP was enacted in 1981. The LIHEAP statute provides that, if a state designates local agencies to administer the program, then they agree to "give special consideration" to public or private nonprofit agencies receiving funds for low-income energy assistance or weatherization prior to LIHEAP's enactment. According to the LIHEAP Clearinghouse, in 30 states CAAs are involved in administering funds, another 13 states have local programs administered by the counties, and the remaining states are either administered at the state level or by nonprofit groups. In most cases, LIHEAP benefits are given directly to utilities or fuel oil suppliers to be applied to recipients' accounts rather than directly to recipients. An exception to this may occur in cases of renters whose utility payments are included in rent and who do not have their own account.

Households Served

Unlike some other federal assistance programs, such as Medicaid or the Supplemental Nutrition Assistance Program (SNAP), simply being eligible for LIHEAP does not entitle a household to LIHEAP benefits. Available benefits are limited by the amount that Congress appropriates each year, so the number of households that are served in a given year depends both on appropriations and how grantees use their funding.

In FY2014, an estimated 6.3 million households received heating and/or winter crisis assistance (the bulk of LIHEAP assistance that is provided). For the number of households receiving LIHEAP heating and winter crisis assistance from FY2000 through FY2014, see Table 2 . While the number of recipient households is down from a peak of 8.1 million in FY2010, the number of households served continues to be higher than in years preceding FY2009, a year when appropriations reached the highest level ever for the program. Appropriations reached $5.1 billion for LIHEAP in both FY2009 and FY2010, and $4.7 billion in FY2011, compared to $2.59 billion in FY2008. In the years leading up to FY2009, recipient households ranged between 5.0 and 5.5 million.

The same trend can be seen in the percentage of federally eligible households that receive heating and/or winter crisis assistance. In the mid-2000s, prior to increased funding in FY2009, the percentage of federally eligible households receiving assistance hovered between 14% and 16%, settling at 16% for FY2006 through FY2008. However, in FY2009 and FY2010, with increased funding for LIHEAP, 21% and 22% of those households federally eligible under the LIHEAP statute were served, respectively. Since the peak of LIHEAP funding, the percentage of eligible households served settled again at 16% in FY2013 and FY2014.

FY2010 through FY2012 saw the highest number of households receiving cooling and/or summer crisis assistance—1.1 million households in each year, compared to 900,000 in FY2009 and 800,000 in FY2014. Prior to FY2009, the number of households receiving cooling and/or summer crisis assistance reached a high point of 700,000 recipients in FY2006. See Table 3 .

In terms of vulnerable populations, HHS estimates that of all households receiving LIHEAP heating assistance in FY2014 (the most recent data publicly available), about 33% had at least one member 60 years of age or older; about 38% had at least one member with a disability; and 19% included at least one child five years of age or younger. Households may include members in more than one of the three categories, and an estimated 74% of recipient-households were in at least one of the three categories. Although some states set LIHEAP eligibility as high as 60% of state median income, on average, LIHEAP households served have very low incomes. In FY2014, 68% of households receiving heating assistance had incomes at or below 100% of poverty and 76% of households receiving cooling assistance were at or below the poverty level.

Benefit Levels

Apart from federal funding levels, a variety of factors help determine to what extent LIHEAP is able to meet its stated goal of assisting low-income households in meeting their home energy needs. These include the following:

the cost of energy for a given household (influenced by energy price fluctuations and variation in kinds of fuels used); the amount of energy consumed (influenced by severity of the weather, energy efficiency of housing, and expected standards of comfort); and the number of eligible households (influenced by population size and health of the economy).

The average LIHEAP benefit varies by state. For example, in FY2014, the most recent year in which data are available, the average heating benefit nationwide was $301, with a range from $78 (Oklahoma) to $1,024 (North Dakota). The average benefit for cooling assistance, available in 19 states in FY2014, was $336, ranging from $121 (Arkansas) to $1,246 (District of Columbia).

One way of looking at LIHEAP benefits over time is to measure them in constant dollars. Each year, the HHS LIHEAP Home Energy Notebook presents average heating and winter crisis benefits in nominal dollars and constant 1981 dollars (the year in which LIHEAP was enacted). Until FY2009, when funding for the program increased by more than $2 billion compared to the previous fiscal year, the general trend in the constant dollar value of LIHEAP benefits since the program's beginning had been one of decline. In FY1981, the average heating and winter crisis benefit, measured in constant 1981 dollars, was $213. By FY1998, it had declined to $117, and although the average benefit reached $187 in FY2001, it generally declined again thereafter, with the exception of $171 in FY2006, when funding was higher than in the immediately preceding and subsequent years. In FY2009, the constant dollar value of the average LIHEAP heating and winter crisis benefit increased by about $58 from the previous year, to $209. Since then, the constant dollar value of the LIHEAP heating and/or winter crisis benefit has again declined, and by FY2014 was back down to $145. (See Table 2 .)

The constant dollar value of the cooling and summer crisis benefit, which is available to a more limited number of households in fewer states, has fluctuated over the years. While the average benefit in 1981 was $129, in the years that followed the average benefit in constant 1981 dollars declined as low as $57 in FY1983 and $49 in FY1990. However, the average benefit grew from FY1990 levels, and by FY2000 and FY2001 the average benefit had reached $107. Between FY2004 and FY2008, the constant dollar value ranged from $72 (in FY2008) to $105 (in FY2006). After FY2009, when funding for LIHEAP increased significantly, the constant dollar value of cooling and summer crisis benefits rose to $142. In FY2014, the average constant dollar benefit was $118. See Table 3 .

Types of LIHEAP Funds

The LIHEAP statute authorizes several separate distributions of LIHEAP funds. The bulk of funds are distributed as "regular" funds, sometimes also referred to as formula or block grant funds. The regular funds are distributed via formula to the states and the District of Columbia. Tribes receive a share of state funding, while a percentage of regular funds is set aside for territories. The LIHEAP statute also authorizes emergency contingency funds, which may be distributed to one or more states, tribes, or territories at the discretion of the Administration. The statute also authorizes a smaller amount of funds for Leveraging Incentive grants, which are distributed to grantees that leverage nonfederal resources for their energy assistance programs. And a portion of Leveraging Incentive grants may be used for competitive Residential Energy Assistance Challenge (REACH) grants that grantees may use for various purposes that improve the energy security of vulnerable low-income families.

Despite the different distribution methods, grantees may use each form of funding for the eligible activities under LIHEAP (e.g., heating and cooling assistance, emergency crisis assistance, and weatherization).

Regular Funds

When LIHEAP was created in 1981, the only funds available were regular funds, which were distributed to the states via a formula developed under the predecessor program to LIHEAP, the Low Income Energy Assistance Program (LIEAP, see Appendix A ). Regular funds continue to be distributed to the states via a formula, though it was changed in 1984 as part of the Human Services Reauthorization Act ( P.L. 98-558 ). The history and operation of the formula are complicated, and the issues are addressed in a separate report, CRS Report RL33275, The LIHEAP Formula , by Libby Perl. Tribes and territories are not directly included in the LIHEAP formula distribution, and the way in which they receive regular funds is described in more detail, below. Regular funds have not been authorized since FY2007, when they were authorized at $5.1 billion ( P.L. 109-58 ).

Tribal Allotments

Indian tribes and tribal organizations have the option to request that they receive and administer their own allotments of LIHEAP funds. Tribal allotments may be based on the number of low-income households (as defined by the LIHEAP statute) residing on a reservation and any adjacent trust land as a proportion of all low-income households in the state. Alternatively, a tribe may work out its funding level with the state and enter into an agreement for an amount to be allocated. A tribe's allotment is then taken from the state's LIHEAP allocation. See Table B-1 for states in which tribes receive set-aside funding.

Funds for the Territories

The LIHEAP statute provides that at least one-tenth, but not more than one-half of 1% of the total regular fund appropriation must be set aside for energy assistance in American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. HHS sets the exact percentage of funds that goes to the territories. In FY2014, HHS set aside 0.5% of funding for the territories, the first time that funding had reached the maximum allowed by the statute. This set-aside has continued in appropriations since FY2014.

Prior to FY2014, and since the inception of the program, the set-aside for territories had been approximately 0.134% of regular funds. This percentage was based on the amount of funding that the territories received under LIEAP, the predecessor program to LIHEAP. For that program, $2.5 million was made available to the territories. Prior to implementation of LIHEAP, in 1981, the territories asked HHS that more funding be provided. However, according to HHS, it decided to provide the same approximate percentage of LIHEAP funding to the territories as was provided as part of LIEAP, concluding that

[HHS] should retain the funding levels originally proposed, since they are based on a congressional determination of need for the 1981 program, and the comments did not include any information demonstrating that changed conditions required a higher relative level of funding as compared to the States than existed in 1981.

HHS allocates funds among the 5 territories based on population, with Puerto Rico receiving approximately 90% of funds. For recent allocations to the territories, see the last rows of Table B-1 and Table B-2 .

Emergency Contingency Funds

Unlike LIHEAP regular funds, emergency contingency funds are not distributed by formula. Instead, they are to be distributed at the Administration's discretion "to meet the additional home energy assistance needs of one or more states arising from a natural disaster or other emergency." The two terms are defined as follows:

"Emergency" includes a natural disaster; a significant home energy supply shortage or disruption; significant increases in the cost of home energy, home energy disconnections, participation in public benefit programs, or unemployment; or an "event meeting such criteria as the [HHS] Secretary may determine to be appropriate." A "natural disaster" is defined as "a weather event (relating to hot or cold weather)," floods, earthquakes, tornadoes, hurricanes, ice storms, or other events as determined by the Secretary.

Since the creation of the emergency contingency fund, funds have been released to grantees for various reasons, including energy price increases, extreme periods of hot or cold weather, and damage caused by natural disasters. In cases of natural disasters, grantees may be flexible in the ways they assist households, particularly those without power due to damaged or destroyed homes. According to HHS guidance, funds may be used to pay for temporary shelter, for transportation to shelter, coats and blankets, as well as for utility reconnection and equipment replacement.

Some form of emergency contingency funds was first appropriated in FY1991, although the funds were not authorized until enactment of the Human Services Amendments of 1994 ( P.L. 103-252 ). Like the genesis of federal energy assistance programs in general, appropriations for energy-related emergencies grew out of high heating oil prices coupled with cold temperatures. Congress voted to appropriate $200 million in FY1991 and referred to the program as an "Energy Emergency Contingency Fund" (see P.L. 101-517 ). Emergency contingency funding was permanently authorized at $600 million in FY1994, and it has remained authorized at that same level.

From the time emergency contingency funds were authorized through FY2011, funds have been appropriated in every year with the exception of FY2003 (when funds appropriated in a previous year were available for distribution). Since FY2011, funds have not been appropriated for emergency contingency funds. In addition, just because funds are appropriated does not mean that the Administration releases them to grantees. In a number of years that funds were appropriated, HHS released only a portion of the funds available (see Table B-3 ).

Emergency Designation

On occasion, LIHEAP emergency contingency funds have been designated as "emergency" for purposes of budget enforcement. For a period starting in FY1995, the LIHEAP authorizing statute provided that emergency contingency funds would be designated as emergency for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177 ), as amended by the Budget Enforcement Act (BEA) of 1990 (enacted as part of P.L. 101-508 ). (The BEA established statutory limits on discretionary spending. However, funds that were designated as an emergency by both the President and in statute were effectively exempt from the spending limits. ) Congress first designated emergency contingency funds as "emergency" for budget enforcement purposes in the FY1992 through FY1994 appropriations acts, and then incorporated the language into the LIHEAP statute upon the inclusion of the emergency contingency fund in the law. The BEA expired in 2002.

While the Budget Control Act of 2011 (BCA; P.L. 112-25 ) further amended the law with new procedures to reduce the deficit, the statutory reference to LIHEAP emergency contingency funds as receiving an automatic emergency designation pursuant to the BBEDCA is no longer operative. The BCA allows for the possibility of an emergency designation as determined by Congress and the President each fiscal year, but the designation has not been used to fund LIHEAP.

Leveraging Incentive and REACH Funds

LIHEAP does not require grantees to match the federal funds they receive. However, a portion of LIHEAP funds may be used for grants based on the amount of outside funds that grantees obtain for energy assistance. These Leveraging Incentive grants were authorized in 1990, when P.L. 101-501 amended the LIHEAP statute to provide a separate funding authorization of $50 million ($30 million if regular funds appropriated are under $1.4 billion) for incentive grants to states that leverage nonfederal resources for their LIHEAP programs. Such resources might include negotiated lower energy rates for low-income households or separate state funds for energy assistance. States are awarded incentive funds in a given fiscal year on the basis of a formula that takes into account their previous fiscal year's success in securing nonfederal resources for their energy assistance program.

In 1994 ( P.L. 103-252 ) the statute was further amended to provide that, of any Leveraging Incentive grants appropriated, up to 25% may be set aside for the Residential Energy Assistance Challenge Option (REACH). Under the REACH option states may be awarded competitive grants for their efforts to increase the efficiency of energy usage among low-income families and to reduce those families' vulnerability to homelessness and other health and safety risks due to high energy costs.

The funding authorization for Leveraging Incentive and REACH grants is separate from regular funds, and the grants have not been authorized since FY2004. In practice, the set-aside for these initiatives has generally been around $22 million to $30 million with dollars taken from annual regular fund appropriations. However, since FY2013, funds have not been set aside for Leveraging Incentive and REACH grants.

Other Federal Sources of Funds Available for Energy Assistance

For a time, beginning in the mid-1980s, additional funds were available to LIHEAP grantees via funds recovered as the result of oil company overcharges that violated price controls instituted in 1973 as part of the Emergency Fuels and Energy Allocation Act ( P.L. 93-159 ). In cases where aggrieved parties could not be identified for reimbursement, funds were distributed to states to be used for energy efficiency purposes, including LIHEAP. Oil overcharge funds that were allocated to LIHEAP reached a peak of $174 million in FY1989, and had diminished to $200,000 by FY2008, the most recent year for which HHS has data available.

In addition, the Social Services Block Grant program allows states to transfer up to 10% of funds to provide low-income home energy assistance, among other purposes. The Temporary Assistance for Needy Families program also gives states the discretion to use funds for home heating and cooling costs.

LIHEAP Appropriations

The LIHEAP Program Year

The federal government's fiscal year, which runs from October 1 to September 30, is not ideally placed for a program like LIHEAP. Most states release the bulk of their LIHEAP funds during the winter months, shortly after federal appropriations are to be finalized. Further, in recent years, appropriations often have not been finalized until well after the fiscal year is underway. This may require states to enter the winter months without certainty as to the amount of funds they will receive.

LIHEAP was not always funded exactly in concert with the federal fiscal year. Beginning in FY1990, for four years (through FY1993) Congress set aside a portion of the funding to be used as "delayed obligations" for the program, as described in appropriations documents, making them available on the last day of the fiscal year. The funds were for purposes of "starting up activities" for the following winter's program. These amounts were small initially, totaling $60 million in FY1990 ( P.L. 101-166 ) and $75 million in FY1991 ( P.L. 101-517 ), but growing to $406 million in FY1992 ( P.L. 102-170 ) and $688 million in FY1993 ( P.L. 102-394 ).

Then, in FY1993, the LIHEAP statute was amended to change the way that the program was funded, recognizing the difficulty for grantees in running a program with little advance notice of the funding level for the coming year. The Augustus F. Hawkins Human Services Reauthorization Act of 1990 ( P.L. 101-501 ) provided that LIHEAP be funded on a program year cycle, from July 1 to June 30, with appropriations made in the fiscal year in which the program year started. This funding structure is referred to as "forward funding." According to the Senate committee report (where the forward funding provision originated), forward funding was meant to give grantees time to plan once they knew how much funding would be available.

Despite the statutory language, Congress never actually appropriated funds for a program year as forward funding, and instead provided advance appropriations for LIHEAP. Advance appropriations for LIHEAP were made for the fiscal year subsequent to the year in which funds were appropriated. From FY1994 through FY2001, there were advance appropriations for LIHEAP in every year but one (FY1997). When the FY2001 appropriations law was enacted, it did not provide advance appropriations for FY2002, and advance appropriations for LIHEAP have not been provided since then.

Recent LIHEAP Funding

FY2019 LIHEAP Funding

For FY2019, as in FY2018, the President's budget proposed no funding for LIHEAP. HHS budget justifications contained language similar to FY2018, saying that:

The FY 2019 request does not include funding for LIHEAP, which is a decrease of $3.4 billion from the FY 2018 Continuing Resolution level. This continues the proposal from the FY 2018 President's Budget. In a constrained budget environment, difficult funding decisions were made to ensure that federal funds are being spent as effectively as possible. Some utility companies and state and local governments also provide heating and cooling assistance. Many states limit regulated utilities from discontinuing heat or cooling during specific timeframes such as certain winter/summer months and/or a certain number of consecutive days where the temperature drops below or increases above a certain level.

The House Appropriations Committee released a draft bill to fund the Departments of Labor, Health and Human Services, and Education (LHHS) in FY2019 on June 14, 2018. The bill would provide the same level of funding for LIHEAP as in FY2018—$3.640 billion in regular funds. Also as in the previous year, the bill would distribute $678.5 million according to the statutory, or "new," LIHEAP formula, with the remainder, $2.962 billion, distributed using "old" formula percentages. (For more information about the LIHEAP formula, see CRS Report RL33275, The LIHEAP Formula , by Libby Perl.) As of the date of this report, the Senate Appropriations Committee had not yet released an LHHS bill.

FY2018 LIHEAP Funding

In FY2018, the appropriation for LIHEAP was $3.640 billion, provided as part of the FY2018 Consolidated Appropriations Act ( P.L. 115-141 ), enacted on March 23, 2018. The appropriation exceeded the FY2017 level of $3.390 billion by $250 million. As in FY2017, all funds were appropriated as regular funds, and the law provided that the majority of funds—$2.962 billion—be distributed according to the "old" LIHEAP formula.

Before enactment of P.L. 115-141 , LIHEAP funding for FY2018 was provided through a series of continuing resolutions (CRs) that funded most federal programs at their FY2017 appropriations levels, less an across-the-board reduction of 0.6791%. On October 20, 2017, HHS announced that it was distributing just over $3 billion in FY2018 funds pursuant to the first CR. After enactment of P.L. 115-141 , HHS announced the distribution of the remainder of appropriated funds on April 23, 2018. For funds distributed to states, tribes, and territories, see Table B-1 .

Prior to enactment of the CRs, the President's budget request proposed to eliminate funding for LIHEAP in FY2018. HHS budget justifications provided this explanation for no new funding for the year:

The FY 2018 request does not include funding for LIHEAP. In a constrained budget environment, difficult funding decisions were made to ensure that federal funds are being spent as effectively as possible. Utility companies and state and local governments provide significant heating and cooling assistance. The majority of states prohibit utilities from discontinuing heat during the winter.

FY2018 was the first time since LIHEAP's enactment that an administration proposed to eliminate funding for the program. See Table B-3 .

Neither the House nor the Senate appropriations committees followed the President's proposal for FY2018 LIHEAP funding. The House Appropriations Committee approved its LHHS Appropriations bill ( H.R. 3358 ) on July 24, 2017. The bill proposed level funding for LIHEAP—$3.390 billion in regular funds, with $491 million allocated according to the "new" LIHEAP formula and the remainder according to the "old" LIHEAP formula.

On September 7, 2017, the Senate Appropriations Committee approved its LHHS bill ( S. 1771 ). The bill would also have provided $3.390 billion in LIHEAP regular funds and the same "new" and "old" formula amounts.

Both the House Appropriations Committee-reported bill and Senate Appropriations Committee-reported bill would have set aside $3 million for training and technical assistance, but neither specified an amount for leveraging incentive and REACH grants. Nor did H.R. 3358 or S. 1771 propose to appropriate emergency contingency funds (the last year emergency contingency funds were appropriated was FY2011).

LIHEAP and Continuing Resolutions

OMB determines the amount of LIHEAP funding that is released to the states pursuant to a CR. Despite the fact that the program is technically funded at the previous year's level, states do not necessarily receive the same amount of LIHEAP funding that they received in the previous year. This is due to a standard provision in continuing resolutions that states the following:

[F]or those programs that would otherwise have high initial rates of operation or complete distribution of appropriations at the beginning of fiscal year 2018 because of distributions of funding to States, foreign countries, grantees, or others, such high initial rates of operation or complete distribution shall not be made, and no grants shall be awarded for such programs funded by this Act that would impinge on final funding prerogatives.

The provision is meant to ensure that funds for a program that are released under a CR do not exceed the amount that is ultimately appropriated for it or effectively constrain Congress in its appropriations decision. Typically, states are eligible to receive their entire LIHEAP formula allocations in the first quarter of the fiscal year if they so choose, qualifying as a program "that would otherwise have high initial rates of operation or complete distribution of appropriations" at the beginning of the fiscal year as stipulated in the CR.

OMB may gauge the amount of LIHEAP funding to release, in part, based on appropriations bills in the House or Senate or, in their absence, on the President's budget proposal. For example, if a proposed funding level in one chamber is lower than what is proposed in the other, then the amount subject to release could be based on the lower proposal (in the event that Congress would ultimately enact the lower funding level).

Other Issues

Program Integrity

In June 2010, the Government Accountability Office (GAO) released a report about the Low Income Home Energy Assistance Program (LIHEAP) entitled Low-Income Home Energy Assistance Program: Greater Fraud Prevention Controls Are Needed . The GAO report found instances of benefit payments to ineligible applicants based on various factors, including the use of Social Security Numbers (SSNs) from deceased or imprisoned individuals as well as the under-reporting of income or over-reporting of household members. In another instance, the GAO set up a fake utility company and through fake applicants was able to obtain LIHEAP benefits.

GAO recommended ways in which HHS could prevent instances of fraud such as these in the future. Among the recommendations in the report were requiring applicants to provide SSNs and checking applicant information against various databases (e.g., Social Security Administration data, state vital records, and state directories of new hires).

HHS reacted to the GAO report and its recommendations in several ways:

The agency issued guidance that encouraged states to require LIHEAP applicants to divulge their SSNs. The LIHEAP statute and regulations do not require grantee states, tribes, and territories to collect SSNs or to verify applicant eligibility against specific databases, and not all states follow such verification procedures. Further, pursuant to the Privacy Act, HHS cannot require states to collect SSNs as part of the LIHEAP application process. However, the Tax Reform Act of 1976 ( P.L. 94-455 ) authorizes states to use SSNs in administering certain programs, including "general public assistance" programs, which HHS has interpreted to include LIHEAP. As a result, HHS released guidance that the law "authorizes States to require SSNs as a condition of eligibility for use in verifying the identity of individual applicants and their household members." As of FY2011, 40 states required LIHEAP applicants to provide SSNs, compared to 28 in FY2010. HHS released an Action Transmittal asking states to supplement the information they provide to HHS for FY2011 to show that they are working to prevent improper payments, fraud, waste, or abuse. The LIHEAP statute directs the HHS Secretary to establish regulations to prevent waste, fraud, and abuse. The regulations in turn require grantees to establish systems and procedures to prevent these activities among clients, vendors, and administering agencies. However, the same section of the statute also states that "[t]he Secretary may not prescribe the manner in which the States will comply with the provisions of this subsection." So while each year states must submit a plan to HHS in which they make "assurances" that they will comply with statutory requirements, there is no specific way that they must go about this. HHS suggested that states report on compliance monitoring, fraud reporting mechanisms, verifying applicant identities, cross-checking SSNs, and verifying applicant income, among others. HHS also assembled a Program Integrity Working Group to recommend ways in which the agency could address some of the issues raised. The working group released a report in April 2012. Among its recommendations were that (1) grantees require applicants to provide SSNs, but should provide for exceptions due to the emergency nature of LIHEAP, (2) HHS collaborate with other agencies, such as the Social Security Administration, to help with verification of identity and income, (3) HHS conduct a cost-benefit analysis of third party verification, and (4) grantees enter into vendor agreements that include provisions to prevent vendor fraud.

Performance Measures

At the direction of OMB, beginning in 2008, HHS staff, together with LIHEAP state directors, worked to arrive at a set of performance measures that would guide data collection and serve as a way of examining outcomes resulting from LIHEAP assistance. The performance measures are also intended to respond to some of the issues raised in the GAO report described in the previous section. States were first required to collect and report performance data for FY2016, though the data have not been made public.

The type of performance data to be collected was published by HHS in a proposed information collection (and request for comment) on June 6, 2013, in the Federal Register and was amended slightly in a notice published a year later. There are three primary performance measures proposed. Each performance measure requires collection of several types of data.

The Average Reduction in Energy Burden for Households Receiving Fuel Assistance: Within this measure, data collected and reported includes the average annual income of LIHEAP recipient households, average LIHEAP benefits, the number of LIHEAP recipient households that use each primary heating source, annual heating fuel consumption by LIHEAP recipient households, and electricity consumption for cooling. Requirements in the initial 2013 Federal Register notice to collect consumption data were made optional in the 2014 Federal Register notice. The Percent of Unduplicated Households Where LIHEAP Prevented a Potential Home Energy Crisis: Among the data collected for this performance measure are the number of households receiving utility past due or disconnect notices, the number receiving a notice from a bulk fuel vendor of an unpaid balance, the number of households who deplete deliverable fuel sources, and the number of households where LIHEAP benefits resulted in repair or replacement of heating or cooling equipment. The Percent of Unduplicated Households Where LIHEAP Benefits Restored Home Energy: This measure involves identifying households where LIHEAP receipt resulted in utility reconnection, purchase of bulk fuel, or repair or replacement of heating or cooling equipment.

While LIHEAP state grantees are the entities required to collect and report the data to HHS, information on fuel and electricity consumption requires input from fuel vendors and utility companies.

Appendix A. Legislative History of Energy Assistance

LIHEAP was not the first federal energy assistance program created to help low-income households with their energy bills. Appropriations for home energy assistance initially came about in the 1970s at the time of the OPEC (Organization of the Petroleum Exporting Countries) Oil Embargo of 1973-1974. In the fall of that year, a number of countries in the Middle East stopped exporting oil to the United States, a stoppage that continued until March of 1974. Prices of heating oil rose, while supplies were restricted. What followed were several years in which Congress directed funds to assistance focused on lowering energy bills through weatherization and education. Later in the 1970s, assistance evolved to include crisis assistance for households facing shutoff or other emergencies, followed by a system of direct payments to subsidize the energy bills of low-income households. When LIHEAP was enacted, direct assistance for energy bills was the focus of the program, but all of these forms of assistance―weatherization, education, and crisis assistance―were made part of the program and continue to be eligible uses of funds. This appendix discusses the evolution of energy assistance in the 1970s and early 1980s, culminating in the creation of LIHEAP in 1982.

Energy Assistance Programs Prior to LIHEAP

The first federal funds for energy assistance were the outgrowth of a program that was created in Maine just after the start of the oil embargo by OPEC countries. In 1973, the Maine Office of Economic Opportunity applied to the federal Office of Economic Opportunity (OEO, the federal agency in charge of administering War on Poverty programs in the 1960s and 1970s) to fund a project they had conceived of called "Project Fuel." Energy costs, particularly the costs of heating oil and wood, were growing in Maine, and the state determined that it would assist low-income and elderly households in meeting their energy needs. OEO approved funding for the state at the end of 1973. Project FUEL used funding primarily to help "winterize" homes, but also to provide crisis counseling, and purchase fuel for use in emergency situations such as equipment breakdown or when dealers ran out of fuel.

Project Fuel prompted what would become the first federal program to assist low-income households during the energy crisis, the Emergency Energy Conservation Program (EECP, P.L. 93-644 ) enacted as part of the Headstart, Economic Opportunity, and Community Partnership Act at the beginning of 1975. The law authorized the Community Services Administration (CSA, which replaced the OEO as part of the same bill) to use funds primarily for weatherization and conservation purposes, but also gave the authority to use funds for fuel voucher or stamp programs. Community Action Agencies, Community Development Corporations, state Offices of Economic Opportunity, and other public or private nonprofit organizations were eligible to apply to administer the funds. Congress first appropriated funds for the EECP in FY1975, $16.5 million, as part of a supplemental appropriations act ( P.L. 94-32 ). Funds for the Emergency Energy Conservation Program (to be used primarily for weatherization purposes) continued to be appropriated through FY1978.

The EECP came to an end with the advent of the Weatherization Assistance Program (WAP), created in 1976 as part of P.L. 94-385 and administered by the Federal Energy Administration (the predecessor to the Department of Energy). WAP was meant to be a supplement to the EECP, not to replace it. However, the programs were similar. Community Action Agencies administered WAP funds and weatherized homes of low-income households. By FY1979, the Administration proposed that weatherization funds be made available only through the DOE program. In that year and thereafter, Congress stopped funding the CSA weatherization program and only appropriated funds to the DOE Weatherization Assistance Program.

At the same time that weatherization assistance was phased out of the CSA, the agency began to administer direct assistance to low-income households to help pay their energy bills. In FY1977, as part of a supplemental appropriations act ( P.L. 95-26 ), $200 million was appropriated to be used through the CSA for a Special Crisis Intervention Program. P.L. 95-26 , which was debated and enacted in the spring of 1977, came just after an unusually cold winter in which both fuel usage and prices had been high, resulting in large numbers of consumers facing utility disconnection. Unlike previous funding for the EECP, which went primarily to fund weatherization, the FY1977 supplemental funding was to be used by the states for direct payments to utilities and fuel suppliers. The program allowed for up to $250 payments to utilities on behalf of customers whose power had been shut off or threatened with shut off, and up to $50 directly to households that could prove "dire financial need" as the result of having paid large fuel bills. Congress again appropriated funds to help households facing energy crises in FY1978 and FY1979 (see Table A-1 ).

In FY1980, Congress expanded energy assistance by appropriating significantly more funding than had been made available in the past, a total of $1.6 billion provided through 2 different agencies. The impetus behind the rather dramatic increase in funding was, as in the early 1970s, the increase in energy prices, particularly heating oil. In 1979, the decontrol of domestic oil prices, together with an increase in OPEC oil prices, led to increases in the price of heating oil and kerosene. An article in the Congressional Quarterly describing the environment surrounding the passage of energy assistance legislation noted the "spectacular rise in the price of home heating oil" as "the biggest factor in the problems that led Congress to take action." In the summer and fall of 1979, the Senate Committee on Labor and Human Resources alone held 12 hearings on energy assistance legislation.

Enactment of LIEAP, the Predecessor Program to LIHEAP

Energy needs of low-income households continued to occupy the President and Congress after the appropriation of energy assistance funding for FY1980. One of the proposals to fund energy assistance for FY1980, S. 1724, the Home Energy Assistance Act (as reported by the Senate Committee on Labor and Human Resources), proposed a new energy assistance program to be authorized from FY1981 through FY1984. The program was enacted in April 1980 as the Low Income Energy Assistance Program (LIEAP) as part of the Crude Oil Windfall Profits Tax Act ( P.L. 96-223 ). LIEAP was to be funded by windfall profits taxes imposed as part of P.L. 96-223 and deposited in a Treasury account, but the law did not provide for the account to be established, so the program was funded by an appropriation. LIEAP was authorized at $3 billion for FY1981; $1.85 billion was appropriated for the program in that year ( P.L. 96-369 ).

Like LIHEAP, the program that was to follow, LIEAP was a block grant program to states. Funds were primarily distributed to the states by formula, with a small amount ($100 million) reserved for crisis assistance. States could use funds to help low-income households pay home energy costs. While the term "home energy" included cooling assistance, states could only provide cooling assistance in cases of medical need. Eligible households were considered those at or below the Bureau of Labor Statistics lower living standard, an income level that exceeded the poverty level in most instances. Recipients of certain means-tested benefits—Aid to Families with Dependent Children (now TANF), Food Stamps (now SNAP), SSI benefits, and certain veterans' benefits—were eligible for LIEAP benefits. Payments could be made to fuel suppliers or utilities, residents, or both, at the discretion of the state. States had some discretion in setting up their programs, with the ability to determine the state and local agencies that would administer the program, who would receive payments, the amount of benefits, certification for eligibility, how to provide benefits to renters, and establishment of funds to emergencies (up to 3% of total).

Most at issue in enactment of LIEAP was how funds would be distributed to the states, specifically whether states would receive the same share of funds, or if colder weather states would have preference. The formula established for LIEAP was complex and incorporated data that included temperatures, energy expenditures, and the number of low-income households. For more information about the LIEAP formula and how it pertains to LIHEAP, see CRS Report RL33275, The LIHEAP Formula , by Libby Perl.

Enactment of LIHEAP

In 1981, Congress enacted a new program, the Low Income Home Energy Assistance Program (LIHEAP), which replaced LIEAP. LIHEAP was similar to its predecessor program in that it was set up as a block grant to states, tribes, and territories to help low-income households meet their energy needs. LIHEAP maintained the same formula distribution as was set up under LIEAP. Unlike LIEAP, grantees were able to use funds for cooling expenses without a showing of medical necessity, as well as for weatherization. Grantees were given the option of setting eligibility at the higher of 150% of poverty or 60% of state median income (rather than the BLS lower living standard), and the program maintained eligibility for recipients of AFDC (now TANF), Food Stamps (now SNAP), SSI benefits, and certain veterans' benefits. The program was authorized at $1.875 billion from FY1982 through FY1984 and was funded at that level in its first year of operation. For historic LIHEAP funding levels, see Table B-3 .

LIHEAP differed from LIEAP in that states were given more flexibility and had fewer administrative requirements in implementation. For example, under the new LIHEAP program, states were only required to report about households assisted annually, compared to quarterly under LIEAP, and HHS did not require uniform data collection or record keeping standards. Under LIEAP, states had to submit detailed changes in plans each time they wanted to modify benefit levels or the way in which funds were used. In applying for LIHEAP funds, the statute only required grantees to make assurances about the services they would provide, and HHS did not have the authority to dictate how states would accomplish program goals or to approve or disapprove state plans.

Appendix B. Tables Showing LIHEAP Funding Levels

In this appendix are two tables that show how LIHEAP funds have been distributed to the states, tribes, and territories during recent fiscal years, and an additional table showing historical funding levels from the time the program was created to the present.

Table B-1 shows the amount of LIHEAP regular funds distributed to states, tribes, and territories pursuant to the FY2018 Consolidated Appropriations Act ( P.L. 115-141 ). Initially LIHEAP was funded through a series of CRs at FY2017 levels less an across-the-board reduction of 0.6791%. On October 20, 2017, HHS announced the first distribution of FY2018 funds to states, tribes, and territories, totaling more than $3 billion. After the final FY2018 appropriations bill was enacted, HHS announced distribution of remaining funds on April 23, 2018. Net allocations from the two distributions to the states are in columns (a) and (c) (i.e., the columns do not include funding for tribes) and tribal allocations are in columns (b) and (d). Allocations for the territories are in the last rows of the table, after the states. Column (e) shows total FY2018 funding for all grantees.

Table B-2 shows the total amount of LIHEAP regular and emergency contingency funds distributed to each state from FY2008 through FY2017; the totals include funds distributed to tribes within the states. Funding for the territories is in the last rows of the table, after the states.

Table B-3 provides historic funding levels for LIHEAP from the time the program was initially funded, in FY1982, through proposed funding in FY2019. The table shows authorization levels for LIHEAP regular funds, Administration budget requests for both regular and emergency contingency funds, the total amount of regular and emergency contingency funds appropriated in each fiscal year, and the total amount of emergency contingency funds distributed.