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. 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. 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. 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. 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. 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.