LIHEAP: Program and Funding

Order Code RL31865 CRS Report for Congress Received through the CRS Web The Low-Income Home Energy Assistance Program (LIHEAP): Program and Funding Updated July 18, 2005 Emilie StoltzfusMarch 23, 2006 Libby Perl Analyst in Social Legislation Domestic Social Policy Division Congressional Research Service ˜ The Library of Congress The Low-Income Home Energy Assistance Program (LIHEAP): Program and Funding Summary The Low-Income Home Energy Assistance program (LIHEAP), established in 1981 (P.L. 97-35), is a block grant program under which the federal government gives states and other jurisdictions annual grants to operate home energy assistance programs for low-income households. Funding authorization for LIHEAP expired with FY2004. However, for FY2005 For FY2006, Congress twice appropriated funds for LIHEAP. First, Congress appropriated approximately $2.161$2.182 billion for LIHEAP, of , of which $1.88598 billion wasis regular funds (allotted to all states) and $298 million was181 million is emergency contingency funds (allotted to one or more states, at the Administration’s discretion, and based on emergency need). The President’s FY2006 budget request includes $2 billion for LIHEAP — $1.800 billion for regular funds and $200 million for contingency funds. On June 24, 2005, the House passed legislation (H.R. 3010) that would provide $2.007 billion in regular LIHEAP funds; it does not provide contingency funds. The Senate Appropriations Committee has approved FY2006 LIHEAP funding of $2.183 billion, of which $1.883 billion would be for regular funds and $300 million would be for emergency contingency (S.Rept. 109-103). As of mid-July 2005, the Administration has released $250 million of the FY2005 emergency contingency funds; a total of $48 million in these funds remain available until expended. The emergency contingency funds were released in late December 2004 ($100 million), late January 2005 ($100 million), and early March 2005 ($50 million) in recognition of high home energy prices, particularly for heating oil and propane. Each of the distributions was made to all states, with half of the money distributed based on the formula used to distribute regular LIHEAP funds and half distributed using that same formula but weighted to increase funding to states where more low-income households use heating oil or propane. On April 21, 2005, the House passed the Energy Policy Act of 2005 (H.R. 6). The bill would authorize annual regular LIHEAP funding of $5.1 billion for FY2005 through FY2007; explicitly permit the purchase of renewable fuels, including biomass, as part of providing home energy assistance; require the Department of Health and Human Services (HHS) to report to Congress on how LIHEAP “could be used more effectively to prevent loss of life from extreme temperatures;” and permit some of the money received by the federal treasury in return for oil drilling in the Arctic National Wildlife Refuge (ANWR) to be appropriated for LIHEAP. On June 28, 2005, the Senate passed its own version of this omnibus energy legislation and did not include any of the House provisions related to LIHEAP. Legislation to reauthorize LIHEAP was passed by both the House and Senate in the 108th Congress but was not enacted. (See Table 5.) In FY2002, most recent HHS data available, some 4.4 million households received LIHEAP heating/winter crisis assistance, compared with an estimated 4.8 million households in FY2001. The average combined Some 570,000 households received cooling aid in FY2002, more than double the number of households that received this aid in FY2001. However, the average value of the cooling aid benefit declined from $219 in FY2001 to $136 at the Administration’s discretion). The funds were appropriated in the Departments of Labor, Health and Human Services, and Education Appropriations Act (P.L. 109-149), and were then subject to a 1% across-the-board rescission in the Department of Defense Appropriations Act (P.L. 109-148). Congress added funds to LIHEAP for FY2007 in the Deficit Reduction Act of 2005, P.L. 109-171, enacted February 8, 2006; Congress then made the funds available for FY2006 through S. 2320, which the President signed into law on March 20, 2006 (P.L. 109-204). The Deficit Reduction Act had appropriated $1 billion for LIHEAP for FY2007 — $250 million for regular funds and $750 million for contingency funds. However, S. 2320 changed the allocation of funds — $500 million for regular funds and $500 million for contingency funds — in addition to making them available for FY2006. Thus, a total of $3.161 billion has been appropriated for LIHEAP for FY2006, of which $2.48 billion is regular funds and $681 million is contingency funds. The President’s budget proposes $1.782 billion for LIHEAP in FY2007, all of which would be allocated to regular funds. On March 16, 2006, the Senate voted in favor of the FY2007 Budget Resolution, S.Con.Res. 83. As part of the Budget Resolution, Senator Jack Reed introduced an amendment, S.Amdt. 3074, to add $3.318 billion to LIHEAP funds, bringing the total assumed for LIHEAP in FY2007 to $5.1 billion. The amendment passed by a vote of 51-49. On January 5, 2006, the Administration released its first distribution of contingency funds for FY2006. The release totaled $100 million, and funds were distributed to all states, the District of Columbia, and the Territories. In FY2005, the Administration released $277.25 million of the $298 million in available contingency funds. The first three of four contingency fund distributions, totaling $250 million, were made to all states on December 23, 2004, January 31, 2005, and March 1, 2005. On September 2, 2005, a fourth distribution of $27.25 million was made to Alabama, Florida, Louisiana, and Mississippi in the wake of Hurricane Katrina. (See Table 2.) In FY2003, the most current year for which data is available, some 4.8 million households received LIHEAP heating/winter crisis assistance, with an average benefit of $312, compared with an estimated 4.4 million households in FY2002. More than 493,000 households received cooling aid in FY2003, with an average benefit of $148, down from 570,000 in FY2002. This report will be updated as legislative or program activities warrant. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Proposed FY2006 LIHEAP Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Energy Legislation and LIHEAP . . . . . . . . . .1 FY2007 Funding . . . . . . . . . . . . . . . . . . . . 3 Other LIHEAP legislation in the 109th Congress. . . . . . . . . . . . . . . . . . . . . . 4 Release ofLIHEAP Contingency Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Program Rules and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Federal Eligibility Standards and Grantee Responsibility . . . . . . . . . . . 6 Kinds of Energy Assistance Available . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Use of Funds . 5 Energy Act Reauthorizes LIHEAP Through FY2007 . . . . . . . . . . . . . . 6 LIHEAP Legislation in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . 7 Program Rules and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Federal Eligibility Standards and Grantee Responsibility . . . . . . . . . . . . 6 Households Served . . .8 Kinds of Energy Assistance Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Use of Funds . . . . . . . . . 7 Benefit Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Funds and Their Distribution . 8 Households Served . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Regular FundsBenefit Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Contingency Funds . . . .Funds and Their Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Leveraging Incentive and REACH11 Regular Funds . . . . . . . . . . . . . . . . . . . . . . 12 Other Funds . . . . . . . . . . . . . . . . . . . . . . .11 Contingency Funds . . . . . . . . . . . . . . . . . . . . . . 12 Legislative History . . . . . . . . . . . . . . . . . . . . . .13 Leveraging Incentive and REACH Funds . . . . . . . . . . . . . . . . . . . . . . 12 Program Authorization13 Other Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Issues . . . . . . . . . .13 Legislative History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Release of Contingency Funds14 Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 LIHEAP Formula . . . . . . . . . . . . . . . . . . . . . . . . .15 LIHEAP Formula . . . . . . . . . . . . . . . . 16 Performance Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1615 List of Tables Table 1. Final FY2005 and Proposed FY2006 LIHEAP Funding . . . . . . . . . . . . 3 Table 2. Recent LIHEAP, and Proposed FY2007 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Table 3. LIHEAP Heating/Winter Crisis Aid, Selected Years2. Recent LIHEAP Funding . . . . . . . . . . . . . . . 8 Table 4. Level of Funds Appropriated and Resulting Distribution Factors for LIHEAP Regular Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Table 5. Major Provisions of LIHEAP Reauthorization Language in the 109th and 108th Congresses3. LIHEAP Heating/Winter Crisis Aid, Selected Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1810 Table 64. LIHEAP Funding by State, FY2002 to FY2005FY2003 to FY2006 . . . . . . . . . . . . . . . . . . 2215 Table 75. LIHEAP Funding: FY1982 to FY2006FY2007 . . . . . . . . . . . . . . . . . . . . . . . . 2517 The Low-Income Home Energy Assistance Program (LIHEAP): Program and Funding Introduction The Low-Income Home Energy Assistance program (LIHEAP), established in 1981 by Title XXVI of P.L. 97-35, is a block grant program under which the federal government gives states, territories, and tribes annual grants to operate home energy assistance programs for low-income households. Funding authorization for LIHEAP expired with FY2004; howeverFor FY2006, Congress first appropriated $2.182161 billion for the program in FY2005, and the House Appropriations committee has proposed $1.985 billion for the program in FY2006. In FY2002to the program, which includes a 1% across-the-board rescission as mandated by the Department of Defense Appropriations Act (P.L. 109148). On March 20, 2006, the President signed P.L. 109-204, which makes an additional $1 billion available for LIHEAP in FY2006, $500 million for regular funds, and $500 million for contingency funds. In FY2003, the most current year for which data could be obtained from the U.S. Department of Health and Human Services (HHS), an estimated 4.48 million households received help meeting heating costs (i.e., heating assistance and/or winter/year-round crisis assistance). Also in FY20021 In FY2003 more than 570493,000 households received cooling assistance, and close to 108,000 received summer crisis aid. The amount of overlap between households that received cooling aid and summer crisis aid is not known; thus an estimated number of households that received aid related to cooling (comparable to those receiving aid with heating costs) is not available. Finally, more than 93over 71,000 received summer crisis aid.2 Approximately 111,000 households received weatherization assistance through LIHEAP in FY2002.1 Recent Developments Funding authorization for LIHEAP expired with FY2004, but Congress appropriated $2.182 billion ($1.885 billion for regular funds and $298 million — designated as emergency funds — for contingency purposes) for the program in FY2005, and both the House and Senate Appropriations Committees have included LIHEAP funding in pending FY2006 legislation. Proposed FY2006 LIHEAP Funding. The House (H.R. 3010), Senate Appropriations Committee (S.Rept. 109-103), and President (FY2006 budget) have each proposed a different funding level for LIHEAP in FY2006; each would also make these funds available in different ways. The President seeks a total of $2.0 billion for LIHEAP in FY2006, of which $1.800 billion was requested for regularFY2003. Recent Developments FY2006 LIHEAP Funding. Congress appropriated a total of $3.161 billion to LIHEAP for FY2006 in two separate laws. The Departments of Labor, Health and Human Services, and Education Appropriations Act, P.L. 109-149, allocated $2 billion for regular funds to be distributed to all states, and $183 million as emergency contingency funds, which may be distributed at the discretion of the Secretary of HHS. After a 1% across-the-board rescission in the Department of Defense Appropriations Act, P.L. 109-148, these amounts were reduced to $1.98 billion and 1 U.S. Department of Health and Human Services, Low Income Home Energy Assistance Program: Report to Congress for FY2002, p. 18FY2003. (Hereafter referred to as LIHEAP Report to to Congress for FY2002.) CRS-2 funds (allotted through formula to each state) and out of which $500,000 would be reserved for a “feasibility study” to “identify options for a thorough and objective evaluation” of the program.2 The remaining $200 million was requested for contingency purposes (distributed to one or more states on the basis of emergency need, as determined by the Administration). The House Appropriations Committee (H.Rept. 109-88) recommended $1.985 billion in LIHEAP funding. However, this proposal was amended on the House floor to add $22 million (H.R. 3010), and this brought the House-approved FY2006 LIHEAP funding level to $2.007 billion; as had been recommended by the House Appropriations Committee, all of these funds would be made available for state formula grants (regular funds). The House-passed regular funding level would apparently exceed the “hold harmless” level of $1.975 billion, which is included in current statute and would appear to trigger use of a different formula to distribute these funds to the states.3 That formula has sometimes been called the “new” formula and is described as the “Tier II” formula in the section below, Funds and Their Distribution. The Senate Appropriations Committee (S.Rept. 109-103) recommends a total of $2.183 billion in LIHEAP funds. Of this amount, $1.883 billion would be for regular funds (formula grants to the states) and out of which $500,000 would be made available for the program evaluation feasibility study (as requested by the President) and $27.5 million are to be set-aside for Leveraging Incentive grants. The remaining $300 million, “designated as an emergency requirement,” would be available for contingency purposes. As of July 18, the full Senate has not yet acted on this committee recommendation. In March, the Senate rejected (by voice vote) an amendment to the Budget Resolution (S.Con.Res. 18) that was brought by Senator Pryor (S.Amdt. 213) and that sought to provide for an increase of $1.2 billion in LIHEAP funding for FY2006. Table 1 shows the final FY2005 funding for LIHEAP as well as the funding proposed for FY2006 by purpose. 2 The U.S. Department of Health and Human Services, Administration for Children and Families (ACF) Justification of Estimates for Appropriations Committees, FY2006, p. b16B-18) also appears to assume that $27.5 million of these regular funds will be set aside for Leveraging Incentive and REACh Option grants. Although the statute (42 U.S.C. 8621(d)) provides a separate authorization for Leveraging Incentive funds, Congress has not used this authority to appropriate funds. Instead, as instructed by Congress (typically in the Conference Report), HHS has set-aside leveraging money from the regular funds appropriation and, as permitted in the statute out of this set-aside it has reserved 25% for REACh grants (42 U.S.C. 8626b (b)- authority for FY1996-FY1999). 3 The statute provides that states may not receive less than the funding amount they would have received in FY1984 had the regular fund appropriation in that year been $1.975 billion. Because Congress typically apportions some of the regular fund grants appropriated for purposes other then regular fund distribution (e.g., leveraging incentive and REACH grants), it is not clear how HHS might interpret the hold harmless level. For more on this issue see discussion of the “Tier II” formula below CRS-3 Table 1. Final FY2005 and Proposed FY2006 LIHEAP Funding Regular State formula grants Set-asides ($300,000 for technical assistance which is permanently authorized in the statute) Contingencya TOTAL Final FY2005 appropriation $1.885 billion — $27.5 million leveraging incentive (authorized by Conference report language) $298 million $2.182 billion President’s Request $1.800 billion — $500,000 - feasibility study (requested in budget) — $27.5 million leveraging incentive (this past practice is assumed in Administration budget documents) $200 million $2.000 billion House (H.R. 3010, as passed June 24, 2005) $2.007 billion None $0 $2.007 billion Senate Appropriations Committee (S. Rept. 109-103) $1.883 billion — $500,000 - feasibility study (recommended in committee report) — $27.5 million leveraging incentive (recommended in committee report) $300 million $2.183 billion Source: Congressional Research Service based on H.R. 3010 (as passed by the House), H.Rept. 10988, S.Rept. 109-103 and U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF) FY2006 Justification of Estimates for Appropriations Committees. a. Contingency funds appropriated in FY2005 received the formal budget designation of “emergency” funds. For FY2006 only the Senate recommends this formal designation for $300 million of its total funding. Through mid-July 2005, the Administration had released all but about $50 million of the FY2005 appropriated contingency funds. These undistributed funds, as specified by P.L. 108-447, are to remain available “until expended.” Energy Legislation and LIHEAP. On April 21, 2005, the House passed omnibus energy legislation (H.R. 6) that would reauthorize LIHEAP funding and that also includes additional provisions related to the program.4 Comparable energy legislation passed in the Senate on June 28, 2005, but does not include any LIHEAPspecific provisions. 4 For broader information on this omnibus energy legislation, see CRS Issue Brief IB10143, Energy Policy: Comprehensive Energy Legislation (H.R. 6) in the 109th Congress, by Robert Bamberger and Carl Behrens. CRS-4 With regard to LIHEAP, the House Energy bill (H.R. 6) would ! set the regular funds authorization level for the program at $5.1 billion in each of FY2005-FY2007 (LIHEAP regular funding authorization was set at $2.0 billion for FY2004 but is currently expired.); ! permit money received by the federal treasury as bonus payments for the right to drill in the Arctic National Wildlife Refuge to be appropriated for LIHEAP (in addition to amounts otherwise available for the program); ! authorize state energy assistance offices, or those they contract with to provide LIHEAP assistance, to purchase renewable fuels as part of providing this aid ; ! require the Department of Energy to report to Congress on the use of renewable fuels in providing aid under LIHEAP; and ! require HHS (within one year of the bill’s enactment) to report to Congress on how LIHEAP “could be more effectively used to prevent loss of life from extreme temperatures.” Some of these provisions were included in the version of H.R. 6 that passed the House in the 108th Congress (see Table 4). However the current legislation would authorize a higher level of LIHEAP funding than would have been permitted in the previous version of the bill. It also newly permits the purchase of renewable fuels by providers of LIHEAP aid and requires a report on LIHEAP and the use of renewable fuels. Other LIHEAP legislation in the 109th Congress. No legislation to reauthorize LIHEAP had been introduced in the Senate as of July 18. In the 108th Congress, the 2003 omnibus energy bill passed by the Senate included reauthorization of LIHEAP and the Senate Health, Education, Labor and Pensions Committee, which has exercised jurisdiction over this program in past years, reported LIHEAP reauthorization language that was also passed by the Senate (S. 1786, 108th Congress).(See Table 4 for a description of the LIHEAP provisions in those bills.) While the Senate did not choose to include LIHEAP in its 2005 energy legislation, the Senate HELP committee may choose to act on LIHEAP again. Two bills introduced in the House propose to amend certain aspects of LIHEAP. H.R. 1210, introduced by Representative Weiner seeks to expand access to the program for seniors by raising the maximum federal income eligibility limit to 100% of the state median income — provided that at least 50% of that household’s income was attributable to an individual aged 65 or older. (Current law sets the maximum federal income eligibility for households at 65% of the state median income, or 150% of the federal poverty level, whichever is greater.) H.R. 108, introduced by Representative Gene Green, would mandate that no more than 50% of the funding provided under LIHEAP could be made available for heating purposes. CRS-5 Release of Contingency Funds. On three occasions, late December 2004, late January 2005, and early March 2005, the Administration released FY2005 contingency funds. A total of $250 million was distributed to all states in response to higher home energy costs, especially for heating oil and propane. The first two distributions totaled $100 million each, and the third totaled $50 million. In each case, half of the contingency amount was distributed to the states based on the same formula used to distribute regular LIHEAP funds, and the remaining half was distributed based primarily on that formula but with certain adjustments made to ensure that extra funds would be received by states with the greatest share of lowincome households using heating oil or propane. As of mid-July 2005, approximately $48 million is remaining from the FY2005 contingency appropriation. P.L. 108-447 provides that these funds are “available until expended.” Table 2 shows recent federal funding levels for LIHEAP, including the amount of contingency funds released and the number of states receiving those contingency funds. Table 2. Recent LIHEAP Funding (Dollars in millions; sums may not equal totals due to rounding) Fiscal year Funds appropriated Regular Contingency funds distributeda Contingencya To all states To some states Total funds distributedb Subtotal Subtotal (to all states) TOTAL 2002 1,700 300 0 100 100 1,700 1,800 2003 1,788 0 200 0 200 1,988 1,988 2004 1,789 99 40 59 99 1,829 1,889 250 c 2,135c 2005 1,885 298 250 0 2,135 Source: Tables prepared by the Congressional Research Service (CRS). a. The amount of contingency funds appropriated in a fiscal year may differ from the amount of contingency funds that are released in that fiscal year for two reasons. First, the LIHEAP statute gives the Administration discretion to release (or not release) any of available contingency funding. Further these funds, as directed by the Congress in its appropriations language, may be available for release in one or more years. b. Regular funds, all of which are shown in both of the Total Funds Distributed columns, include all regular funding distributed by formula to the states, the tribes, and the District of Columbia, as well as set-asides for the territories, leveraging incentive grants, REACH grants, and technical assistance (total set-asides approximately $30 million). The “Subtotal to all states” column includes all regular funds plus any contingency funds that were distributed to all states; the “Total” column includes all regular funds plus any contingency funds that were distributed to one or more states. c. This amount includes total contingency funds released as of mid-July 2005 and total regular funds appropriated for FY2005. Regular LIHEAP funds are made available to states on a quarterly basis (October, January, April, and July). However, states may specify what percent of their total allotment they wish to receive at each allotment and many states receive all, or the great majority of their LIHEAP funds in the first two quarterly disbursements. CRS-6 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 (collectively referred to as grantees) who receive federal funds. The federal government (HHS) may not dictate how grantees implement “assurances” that they will comply with general federal guidelines. Federal Eligibility Standards and Grantee Responsibility. Federal law limits eligibility to households with incomes up to 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. States 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), Food Stamps, or certain needs-tested veteran’sFY2003.) 2 The amount of overlap between households that received cooling aid and summer crisis aid is not known; thus an estimated number of households that received aid related to cooling (comparable to those receiving aid with heating costs) is not available. CRS-2 $181 million.3 The contingency funds remain available through September 30, 2006. Because funds were not appropriated until the end of December 2005, Congress passed three continuing resolutions to fund LIHEAP prior to the passage of P.L. 109149.4 Congress made available an additional $1 billion for LIHEAP in S. 2320, which the President signed into law on March 20, 2006, P.L. 109-204. Senator Snowe introduced S. 2320 on February 16, 2006. It proposed to shift funds originally appropriated to LIHEAP for FY2007, in the Deficit Reduction Act of 2005 (P.L. 109171), to FY2006. P.L. 109-171 had appropriated $1 billion for LIHEAP for FY2007 — $250 million for regular funds and $750 million for contingency funds. On March 2, 2006, the Senate began to debate S. 2320, and voted 66 to 31 to waive the Budget Act. The Senate then passed an amendment by Senator John Kyl (S.Amdt. 2899) to distribute the entire $1 billion as regular block grant funds. The bill was further amended on March 7, when the Senate voted in favor of Senator Snowe’s amendment to allocate $500 million to regular funds and $500 million to contingency funds (S.Amdt. 2913). The Senate voted in favor of the bill that same day. Then, on March 16, the House also voted in favor of S. 2320, and the President signed the bill on March 20. The contingency funds remain available until September 30, 2006. Due to high anticipated heating costs for the winter of 2005-2006,5 Congress made a number of efforts to appropriate additional funds to LIHEAP for FY2006. Initially, the President’s FY2006 budget proposed a total of $2 billion for LIHEAP, of which $1.8 billion was requested for regular funds. Out of the regular fund amount, $500,000 would have been reserved for a “feasibility study” to “identify options for a thorough and objective evaluation” of the program.6 In the Departments of Labor, Health and Human Services and Education appropriations bill (H.R. 3010), the House Appropriations Committee (H.Rept. 109143) recommended $1.985 billion in LIHEAP funding. However, this proposal was 3 In previous years, HHS has made proportionate cuts in the individual budget authorities within LIHEAP — regular funds, contingency funds, Leveraging Incentive and REACH grants, and training and technical assistance — in order to comply with rescission requests. 4 P.L. 109-77 funded programs through November 18, 2005, P.L. 109-105 provided funding through December 17, 2005, and P.L. 109-128 provided funding through December 31, 2005. 5 Energy Information Administration, “Short-Term Energy Outlook at Winter Fuels Outlook,” December 6, 2005, available at [http://www.eia.doe.gov/pub/forecasting/steo/ oldsteos/dec05.pdf]. The Short-Term Energy Outlook is updated monthly. 6 The U.S. Department of Health and Human Services, Administration for Children and Families (ACF) Justification of Estimates for Appropriations Committees, FY2006, p. B16B-18) also appears to assume that $27.5 million of these regular funds will be set aside for Leveraging Incentive and REACH Option grants. Although the statute [42 U.S.C. 8621(d)] provides a separate authorization for Leveraging Incentive funds, Congress has not used this authority to appropriate funds. Instead, as instructed by Congress (typically in the conference report), HHS has set aside leveraging money from the regular funds appropriation and, as permitted in the statute out of this set-aside, it has reserved 25% for REACH grants [42 U.S.C. 8626b(b)- authority for FY1996-FY1999]. CRS-3 amended on the House floor to add $22 million, bringing the House-approved FY2006 LIHEAP funding level in H.R. 3010 to $2.007 billion. All of these funds would have been made available for regular funds. The Senate Appropriations Committee (S.Rept. 109-103) recommended a total of $2.183 billion in LIHEAP funds. Of this amount, $1.883 billion would have been available for regular funds, out of which $500,000 would have been made available for the program evaluation feasibility study (as requested by the President), and $27.5 million would have been set-aside for Leveraging Incentive grants. The remaining $300 million would have been available for contingency purposes. When H.R. 3010 reached the Senate floor, four Senators proposed amendments that would have added funds to LIHEAP in addition to the amounts provided in S.Rept. 109-103. Senator Judd Gregg introduced two amendments to increase the regular funds appropriation to $3.159 billion (S.Amdt. 2290 and S.Amdt. 2253). Senator Jack Reed proposed to increase total LIHEAP funding to $5.1 billion (S.Amdt. 2194). Finally, Senators Ben Nelson and Thomas Carper proposed to increase the regular funds appropriation to $3.483 billion (S.Amdt. 2274). None of the amendments passed, and the Senate approved the amounts in S.Rept. 109-103 in a vote on October 27, 2005. The first conference report for H.R. 3010 allocated a total of $2.183 billion for LIHEAP (H.Rept. 109-300), of which $2 billion was allocated for regular funds and $183 million for contingency funds. Of the $2 billion in regular funds, $27.5 million was provided for Leveraging Incentive grants. On November 17, 2005, the House failed to pass H.Rept. 109-300. After another conference, the second conference report (H.Rept. 109-337) contained the identical amount of funding for LIHEAP. The House approved H.Rept. 109-337 on December 14, 2005; the Senate approved it on December 21, 2005. On December 30, the President signed the bill into law as P.L. 109-149. Two additional bills contained provisions that would have provided funding for LIHEAP in FY2006. First, the conference report for the Department of Defense appropriations bill (H.R. 2863, H.Rept. 109-359) would have appropriated an additional $2 billion for LIHEAP for FY2006, of which $1.5 billion would have gone to contingency funds, and $500 million would have gone to regular funds. However, the additional LIHEAP funds were removed from H.Rept. 109-359 along with a provision to allow drilling for oil in the Arctic National Wildlife Refuge (ANWR), when, on December 21, 2005, the Senate failed to vote in favor of cloture on H.Rept. 109-359. The provision to allow for oil drilling prevented the cloture vote, and, according to the sponsor of the ANWR provision, Senator Ted Stevens, LIHEAP funding was tied to oil drilling. He stated that future proceeds from ANWR would have paid for the $2 billion allocation to LIHEAP, and “unless ANWR is back in [the bill], there is not money for LIHEAP....”7 As a result, when the Senate removed the ANWR provision in order to ensure the bill’s passage, funding for LIHEAP was also removed from the bill (S.Con.Res. 74). 7 Congressional Record, December 19, 2005, pp. S13991-S13992. CRS-4 A second provision to fund LIHEAP was present in the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, H.R. 4939. The House Appropriations Committee adopted an amendment by Representative David Obey, as modified by Representative Ralph Regula, that would make available in FY2006 funds for LIHEAP that were appropriated for FY2007 in the Deficit Reduction Act of 2005 (P.L. 109-171). Representative Obey’s amendment would have made the entire $1 billion in the Deficit Reduction Act available for FY2006, while Representative Regula’s amendment would make only the $750 million in contingency funds available for FY2006. The bill would make the contingency funds available until the end of FY2007. The House is expected to strike the LIHEAP provisions due to the passage of S. 2320 (described in the Recent Developments section earlier in this report). FY2007 Funding. In his FY2007 budget, the President would provide $1.782 billion for LIHEAP, all of which would be allocated to regular funds. On March 16, 2006, the Senate voted in favor of the FY2007 Budget Resolution, S.Con.Res. 83. As part of the Budget Resolution, Senator Jack Reed introduced an amendment, S.Amdt. 3074, to add $3.318 billion to LIHEAP funds, bringing the total amount assumed in the resolution for LIHEAP in FY2007 to $5.1 billion. The amendment passed by a vote of 51-49. Table 1 shows LIHEAP funding for FY2005 and FY2006, and proposed funding for FY2007. Table 1. Final FY2005 and FY2006 LIHEAP Funding, and Proposed FY2007 Funding Regular State formula grants Set-asides Contingencya TOTAL — $27.5 million — leveraging incentive (authorized by conference report language) $298 million $2.182 billion $181 million $2.161 billion ($300,000 for technical assistance, which is permanently authorized in the statute) Final FY2005 Appropriation P.L. 108-447 $1.885 billion Final FY2006 Appropriationb P.L. 109-149 $1.98 billion — $27.5 million — leveraging incentive (authorized by conference report language) P.L. 109-204c $500 million None $500 million $1.0 billion Total $2.48 billion — $27.5 million — $681 million $3.161 billion CRS-5 Proposed FY2007 President’s Request $1.782 billion — $27.225 million — leveraging incentive (this amount is assumed in Administration budget documents) $0 1.782 billion Source: Congressional Research Service based on P.L. 108-447, P.L. 109-148, P.L. 109-149, P.L. 109-171, P.L. 109-204, and U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF) FY2007 Justification of Estimates for Appropriations Committees. a. Contingency funds appropriated in FY2005 received the formal budget designation of “emergency” funds. For FY2006, only the Senate recommended this formal designation for $300 million of its total funding. b. Under the Department of Defense Appropriations Act (P.L. 109-148), discretionary spending in FY2006 was reduced by 1% through an across-the-board rescission. The amounts in P.L. 109149 include the rescission. c. The funds made available for FY2006 in P.L. 109-204 were originally appropriated for FY2007 in the Deficit Reduction Act of 2005, P.L. 109-171. Congress shifted the funds to FY2006 in P.L. 109-204. LIHEAP Contingency Funds. On January 5, 2006, the Administration released $100 million in contingency funds, its first distribution for FY2006. The funds were disbursed to all states, the District of Columbia, and the Territories using the regular block grant allocation, weighted by the percentage of low-income households in each state that use natural gas, heating oil, and propane for heat. For a breakdown of funds, see Table 5. In FY2005 the Administration released contingency funds four times. On three occasions, December 23, 2004, January 31, 2005, and March 1, 2005, the Administration distributed a total of $250 million to all states in response to higher home energy costs, especially for heating oil and propane. The first two distributions totaled $100 million each, and the third totaled $50 million. In each case, half of the contingency amount was distributed to the states based on the same formula used to distribute regular LIHEAP funds, and the remaining half was distributed based primarily on that formula but with certain adjustments made to ensure that extra funds would be received by states with the greatest share of low-income households using heating oil or propane. In early September, the Administration released $27.25 million to states affected by Hurricane Katrina. Alabama received $2 million, Florida received $1.5 million, Louisiana received $12 million, and Mississippi received $11.5 million. The funds may be used to pay for energy costs, the costs of transportation to shelters for those whose health is endangered due to lack of access to cooling, utility reconnections, and repairs to furnaces, insulation, and air conditioners. Approximately $20.75 million is remaining from the FY2005 contingency appropriation. P.L. 108-447 provides that these funds are “available until expended.” After the distribution of funds on January 5, 2006, approximately $102 million in contingency funds remains available for FY2006. CRS-6 Table 2 shows recent federal funding levels for LIHEAP, including the amount of contingency funds released. Table 2. Recent LIHEAP Funding (Dollars in millions; sums may not equal totals due to rounding) Fiscal year Contingency funds distributeda Funds appropriated Regularc Contingency To all states To some states Total funds distributedb Subtotal Subtotal (to all states) TOTAL 2002 1,700 300 0 100 100 1,700 1,800 2003 1,788 0 200 0 200 1,988 1,988 2004 1,789 99 40 59 99 1,829 1,889 277.25 2,135 c 2,162c 100 2,080 2,080 2005 1,885 298 250 27.25 2006d 2,480 681 100 — Source: Tables prepared by the Congressional Research Service (CRS). a. The amount of contingency funds appropriated in a fiscal year may differ from the amount of contingency funds that are distributed in that fiscal year for two reasons: First, the LIHEAP statute gives the Administration discretion to release (or not release) any of the available contingency funding. Further, these funds, as directed by the Congress in its appropriations language, may be available for release in one or more years. b. Regular funds, all of which are included in both of the Total Funds Distributed columns, include all regular funding distributed by formula to the states, the tribes, and the District of Columbia, as well as set-asides for the territories, leveraging incentive grants, REACH grants, and technical assistance (with total set-asides of approximately $30 million). The “Subtotal to all states” column includes all regular funds plus any contingency funds that were distributed to all states; the “Total” column includes all regular funds plus any contingency funds that were distributed to one or more states. c. Regular LIHEAP funds are made available to states on a quarterly basis (October, January, April, and July). However, states may specify what percentage of their total allotment they wish to receive in each quarter, and many states receive all, or the great majority of, their LIHEAP funds in the first two quarterly disbursements. d. It is not clear whether the funds appropriated in P.L. 109-204 will be subject to the 1% rescission in P.L. 109-148. As of March 22, 2006, HHS had not distributed the regular funds appropriated in P.L. 109-204. Energy Act Reauthorizes LIHEAP Through FY2007. The Energy Policy Act of 2005 (P.L. 109-58) reauthorized LIHEAP for FY2005-FY2007. The law was signed by the President on August 8, 2005. With regard to LIHEAP, P.L. 109-58: ! sets the regular funds authorization level for the program at $5.1 billion in each of FY2005-FY2007 (LIHEAP regular funding authorization was set at $2 billion for FY2004); ! allows the Secretary of the Interior, when disposing of in-kind oil and gas royalties taken from oil and gas leases, to grant a preference CRS-7 for the purpose of providing additional resources to support federal low-income energy assistance programs; ! authorizes state energy assistance offices, or those they contract with, to provide LIHEAP assistance to purchase renewable fuels as part of providing this aid; ! requires the Department of Energy to report to Congress on the use of renewable fuels in providing aid under LIHEAP; and ! requires HHS (within one year of the bill’s enactment) to report to Congress on how LIHEAP “could be more effectively used to prevent loss of life from extreme temperatures.” LIHEAP Legislation in the 109th Congress. At least ten House and Senate bills introduced in the 109th Congress would provide funding for LIHEAP by increasing federal revenues from the oil and natural gas industries. The methods of obtaining funds include imposing windfall profits taxes on the oil and/or natural gas industries, suspending oil and natural gas royalty relief, repealing tax subsidies to the oil and gas industries, and imposing fines and penalties on those companies and individuals who participate in price gouging in the sale of fuels.8 Another bill, H.R. 4318, would allow federal funds to be used for natural gas leasing on the outer continental shelf, with a portion of royalty proceeds to fund LIHEAP. As of March 2006, each of these eleven bills remains in committee. Two bills introduced in the House propose to amend certain aspects of LIHEAP. H.R. 1210, introduced by Representative Anthony Weiner, seeks to expand access to the program for seniors by raising the maximum federal income eligibility limit to 100% of the state median income — provided that at least 50% of that household’s income was attributable to an individual aged 65 or older. (Current law sets the maximum federal income eligibility for households at 60% of the state median income, or 150% of the federal poverty level, whichever is greater.) H.R. 108, introduced by Representative Gene Green, would mandate that no more than 50% of the funding provided under LIHEAP could be made available for heating purposes. Both bills were referred to the Committees on Energy and Commerce, and Education and the Workforce. 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 (collectively referred to as grantees) who receive federal funds. The federal government (HHS) may not dictate how grantees implement “assurances” that they will comply with general federal guidelines. 8 Among those bills introduced are H.R. 3664, H.R. 3710, H.R. 3936, H.R. 4248, H.R.4263, H.R. 4276, H.R. 4420, H.R. 4449, H.R. 4479, and S. 1981. CRS-8 Federal Eligibility Standards and Grantee Responsibility. Federal law limits LIHEAP eligibility to households with incomes up to 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. States 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), Food Stamps, or certain needs-tested veterans’ programs. Within these limits, grantees decide which, if any, assistance categories to include, what income limits to use, and whether to impose other eligibility tests. The statute gives priority for aid to households with the greatest energy needs or cost burdens, especially those that include disabled individuals, frail older individuals, or young children. Federal standards require grantees to treat owners and renters “equitably,” to adjust benefits for household income and home energy costs, and to have a system of “crisis intervention” assistance for those in immediate need. LIHEAP assistance does not reduce eligibility or benefits under other aid programs. Federal rules also require outreach activities, coordination with the Department of Energy’s Weatherization Assistance Program, annual audits and appropriate fiscal controls, and fair hearings for those aggrieved. Grantees decide the mix and dollar range of benefits, choose how benefits are provided, and decide what agencies will administer the program.59 Kinds of Energy Assistance Available. Funds are available for four types of energy assistance to eligible households: ! ! ! ! help paying heating or cooling bills; low-cost weatherization projects (e.g., window replacement or other home-energy related repair; limited to 15% of allotment unless a grantee has a waiver for up to 25%); services to reduce need for energy assistance (e.g., needs assessment, counseling on how to reduce energy consumption; limited to 5% of allotment); and help with energy-related emergencies (winter or summer crisis aid). Use of Funds. The majority of LIHEAP funding is used to offset home heating costs. In FY2002FY2003 approximately 6872% of all LIHEAP funds were used to provide heating assistance or crisis aid related primarily to heating needs; all states 5 Information regarding state LIHEAP program characteristics and contacts is available at [http://www.ncat.org/liheap/sp.htm]. CRS-7 (including the District of Columbia) provided some heating assistance, and nearly all also offered crisis aid related to heating needs. In that same year, more than 43.5% of funds were used for cooling/summer crisis aid; just 1915 states offered cooling assistance and only six offered summer crisis aid. Also in FY2002 11FY2003 10.5% of total LIHEAP funds were used for weatherization services (provided by 4446 states); 8.2% of available funds were used for administration and planning purposes (51 states), and 1% of the FY2002 9 Information regarding state LIHEAP program characteristics and contacts is available at [http://www.liheap.ncat.org/sp.htm]. CRS-9 FY2003 funds were used to offer services to reduce the need for energy assistance assistance (provided by 2321 states).610 Households Served. Since the LIHEAP program began in the early 1980s, both the percentage of eligible households served and absolute number of households receiving heating/winter crisis assistance have generally declined. However, in FY2001 both figures increased somewhat before dropping again in FY2002. (See Table 3 below.) In FY2002, the number of households receiving cooling aid appears to have risen well above the half-million mark for the first time in program history. States reported that in FY2002 (the most recent year for which preliminary HHS-compiled data are available)FY2003 approximately 4.14 million households received assistance with heating payments; 570,000493,694 received cooling aid; 999,000 received approximately 1.1 million received winter/year-round crisis aid; 108,00071,360 received summer crisis aid; and 93 111,000 received weatherization assistance. AsBecause many households may receive more than one kind of LIHEAP assistance, a total, unduplicated number of households assisted is not available. However, these data are used to estimate that some 4.48 million households received heating assistance or heat-related crisis aid in FY2002.7 These households represent about 14% of all federally (income) eligible households. States have some discretion to set income eligibility levels below the maximum federal income eligibility standard, however, and many states do this. Thus the national share of state-income-eligible households receiving heating/winter crisis aid in FY2002 was approximately 21%.8 FY2003.11 The Census Bureau’s 20022003 Annual Social and Economic Supplement indicates that among all households receiving LIHEAP heating assistance, about 3736% had at least one member 60 years of age or older; about 5048% had at least one disabled member; and some 2123% included at least one child five years of age or younger. These same census data showed that a minority of households receiving LIHEAP heating assistance also received other kinds of federal aid: an estimated 1112% received TANF; 2824% received SSI; and 2726% lived in rent-subsidized or public housing.912 Benefit Levels. The constant dollar value of LIHEAP heating/winter crisis benefits declined from the program’s beginning through FY2000. In FY2001 it peaked sharply, before declining again in FY2002. In FY2002 the average household 6 Based on state-reported total LIHEAP expenditures for FY2002 LIHEAP heating/winter crisis benefit was $291 (compared to $364 in FY2001), and in FY2003, it rose to $312. The average cooling benefit, which is available to a more limited number of households in far fewer states, had largely risen, until FY2002, when it fell sharply. In FY2003 the average cooling aid benefit was $148, compared to $136 in FY2002, and down from $219 in FY2001 and $228 in FY2000.13 10 Based on state-reported total LIHEAP expenditures for FY2003 (including federal and any supplemental non-federal funding) of $1.9232.112 billion. LIHEAP Report to Congress for FY2002FY2003, p. 14. 7 Ibid., p. 18. 8 Ibid., p. 19. 9 Ibid., pp. 19-21. CRS-8 LIHEAP heating/winter crisis benefit was $291 (compared to $364 in FY2001 and $270 in FY2000). (See Table 3.) The average cooling benefit, which is available to a more limited number of households in far fewer states, has largely risen, except in FY2002, when it fell sharply. In FY2002 the average cooling aid benefit was $136 compared to $219 in FY2001 and $228 in FY2000. 11 LIHEAP Report to Congress for FY2003, p. 19. 12 Ibid., pp. 19-21. 13 Ibid., pp. 21-22. The combined average cooling/summer crisis benefit level for FY2003 was $163, up from $145 in FY2002. However, for FY2001 this average benefit amount was $211, and for FY2000 it was $206. In constant (1981 dollars) the average cooling/summer crisis benefit was worth $57 in FY1983, $107 in both FY2000 and FY2001, $70 in FY2002, and approximately $80 in FY2003. CRS-10 Table 3. LIHEAP Heating/Winter Crisis Aid, Selected Years Fiscal year 1983 Households Number receiving aid (in millions) Number federally eligible (in millions) Federally eligible and receiving aid Benefit Levels Average benefit (nominal dollars) Average benefit (constant 1981 dollars)a Costs Offset Portion of winter heating bill covered by LIHEAP (for all federally eligible households)b Portion of household income required for home heating (for LIHEAP-recipient households) 1983 1990 1993 1997 1998 1999 2000 2001 2002 2003 6.8 5.8 5.6 4.3 3.9 3.6 3.9 4.8 4.4 4.8 22.2 25.4 28.4 29.0 29.1 29.0 29.4 30.4 32.7 34.5 31% 23% 20% 15% 13% 12% 13% 16% 13% 14% $225 $209 $201 $213 $213 $237 $270 $364 $291 $312 $209 $147 $129 $118 $117 $128 $140 $187 $147 $154 18% 15% 11% 9% 9% 9% 3.4%11% 14% 12% NAc 3.3% 3.3% 4.7% NAc 1.33.6% 4.9% 1.1% 1.0% 1.7% NAc 18% 15% 11% 11% 141.3% NAc Before receiving LIHEAP benefit 8.3% 4.5% 4.7% 4.03.4% After receiving LIHEAP benefit 2.6% 2.0% 2.4% 1.93% Source: Table compiled by Congressional Research Service (CRS) based on information provided by or included in the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services, Division of Energy Assistance, LIHEAP Home Energy Assistance Notebooks for FY1998, FY2000, FY2001, FY2002 and FY2003and FY2002. a. The constant dollars are based on the 1981 value of the benefit (using the CPI-U index). b. These percentages represent the estimated portion of combined home heating costs for all households federally eligible for LIHEAP that was offset by LIHEAP heating/winter crisis assistance. c. FY2002FY2003 data on these trends are not available from the LIHEAP Home Energy Assistance Notebook for FY2002. 10 Ibid., pp. 20-21. A combined average cooling/summer crisis benefit level is not yet available for FY2002. However, for FY2001 this average benefit amount was $211, and for FY2000 it was $206. In constant (1981 dollars) the average cooling/summer crisis benefit was worth $57 in FY1983 and $107 in both FY2000 and FY2001. CRS-9 for these trends are not yet available. Although LIHEAP benefits now cover a smaller portion of home heating bills than in earlier years, the portion of household income required for home heating by LIHEAP-recipient households is less than when the program began, and. LIHEAP recipient households nowalso spend less of their income on heating needs than they did when the program began. After taking into account their LIHEAP benefit, LIHEAPrecipient households spent an average of 1.73% of their total income for heating in FY2001FY2002 compared to 1.0% in FY2000 and 2.6% in FY1983. (See Table 3.) CRS-11 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.1114 These include — ! ! ! 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). Funds and Their Distribution The LIHEAP statute authorizes regular funds appropriations, which are allocated to all states based on a statutory formula, and contingency fund appropriations, which are allocated to one or more states at the discretion of the Administration. It also authorizes a smaller amount of funds for incentive grants to states whothat leverage non-federal resources for their energy assistance programs and it allows states to draw on certain other resources. Regular Funds. Regular funds are distributed to states according to a threetier formula included in the LIHEAP statute and based on the level of funds appropriated in a given fiscal year.12 Although provision of cooling assistance has been authorized from the beginning of LIHEAP (initially only when medically necessary), the original method for distributing regular funds was largely based on home heating needs of low-income households. The statute also did not provide for the use of updated population, home heating need, or other data. In 1984 (P.L. 98-558) Congress enacted a new distribution formula that requires taking into account the home energy needs of low-income households — whether heating or cooling related — and also provides that the data used for calculating the distribution should be the most recent available. However, in order for these new 11 12 See also CRS Report RS20761, LIHEAP and Residential Energy Costs, by Bernard Gelb. a given fiscal year.15 The three-tier formula is the result of changes to the LIHEAP statute in 1984 through the Human Services Reauthorization Act (P.L. 98-558). Prior to the changes in P.L. 98-558, LIHEAP allotments to the states were based largely on home heating needs with minimal consideration of cooling costs, and did not provide for the use of updated data, including population and energy costs.16 The new distribution formula provides that in determining state allotments the Department of Health and Human Services shall use “the most recent satisfactory data available” and consider home energy costs of low-income households (not simply all households, as was previously the case). These changes to the calculation of state allotments mean that some states will receive a smaller percentage share of regular funds, while some will receive a larger share. In order to offset the losses to certain states resulting from the formula change, and “prevent severe disruption to 14 See also CRS Report RS20761, LIHEAP and Residential Energy Costs, by Bernard Gelb. 15 States are defined to include the District of Columbia. Indian tribes receive funds out of state allotments that are proportionate to their share of LIHEAP-eligible households in the state. Before state allotments are made, the statute provides that at least one-tenth (but not more than one-half) of 1% of the total appropriation must be set-aside for energy assistance in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. CRS-10 measures to be used, Congress also stipulated that — for FY1986 and succeeding years — no state could receive less money than it would have received in FY1984 (had the LIHEAP funding in that year been $1.975 billion). Funding levels for LIHEAP have only twice exceeded this level, and thus the original distribution formula has been used in every year beginning with FY1987. Should a higher funding level bring the new distribution formula into effect, the use of current data, particularly updated population numbers, as well as the much increased weight given to cooling needs, would significantly alter the share of LIHEAP funds that states receive. At the same time, should funding increase to certain specified amounts, the three-tier formula now written in law includes provisions designed to maintain an absolute dollar as well as percentage share (or rate) amount of funding that a state could expect to receive. These stipulations are referred to as “hold-harmless” provisions.13 The three-tier current law formula is described in more detail below. Tier I. For funding levels at or below $1.975 billion states receive a fixed share of the total funds (or a rate) that was first used in FY1981.14 This Tier I rate has been used to distribute regular LIHEAP funds in every program year except FY1985 and FY1986. It was created using formula factors that resulted in greater proportionate funding for cold-weather states with the highest number of low-income households. Tier II. For appropriations above $1.975 billion and up to $2.25 billion a Tier II rate applies.15 This distribution rate is based on the most current available data regarding home energy expenditures (heating and cooling) of low-income households. However, under this new distribution rate no state may receive less funding than it would have under the Tier I distribution rate as it was in effect for FY1984 (and assuming a $1.975 billion appropriation). To ensure this “holdharmless” provision can be met, those states with the greatest increase in their funding rate must have that percentage share of funds ratably reduced. The Tier II distribution effectively ensures that, given the required increase in LIHEAP funding, a state cannot receive less than a state-specific absolute dollar amount. 13 aside for energy assistance in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. 16 For more information on the history of the LIHEAP formula, see CRS Report RL33275, Low-Income Home Energy Assistance Program (LIHEAP) Allocation Rates: Legislative History and Current Law, by Julie Whittaker and Libby Perl. CRS-12 programs,”17 Congress implemented two “hold harmless” provisions in P.L. 98-558 to prevent states from losing too much funding. This resulted in the three-tier current law formula, which is described in more detail below.18 Tier I. The Tier I formula is used to allocate funds when the total LIHEAP regular fund appropriation is less than $1.975 billion. Neither hold harmless provision applies at the Tier I level, and HHS allocates funds according to the allotment percentages used under the pre-1984 formula. The old formula is used because the amount of appropriated funds required to trigger the new formula is $1.975 billion. The LIHEAP statute stipulates that for FY1986 and succeeding years, no state shall receive less money than it would have received in FY1984 had the LIHEAP funding in that year been $1.975 billion.19 According to HHS, then, the LIHEAP statute requires use of the old allotment percentages when funding is less than $1.975 billion.20 Funding levels for LIHEAP have only twice exceeded the $1.975 billion level, in FY1985 and FY1986. Thus, since 1987, states have continued to receive the same allotment percentages they received under the previous LIHEAP formula. Tier II. For appropriations above $1.975 billion and up to $2.25 billion, the Tier II rate applies, and HHS uses the formula enacted in 1984 to calculate state allotments. Under the Tier II formula, a hold harmless level applies, and no state may receive less funding than it would have received under the Tier I distribution rate as it was in effect for FY1984, assuming a $1.975 billion appropriation.21 State allotment percentages may be different, however. To ensure that states receive their hold harmless levels of funding, those states that gain the most funding under the new formula must have their percentage share of funds ratably reduced to bring other states up to the hold harmless level.22 17 Report of the Committee on Energy and Commerce (H.Rept. 98-139, Part 2), to accompany H.R. 2439, May 15, 1984, p. 13. 18 For more information on the formula and the percentage share of funds a state would receive at various levels of funding, see CRS Report RS21605, Low-Income Home Energy Assistance Program (LIHEAP): Formula and Estimated Allocation Rates, by Julie Whittaker. 14 Current law provides that when the newer formula is used, a state cannot receive less money than it would have received in FY1984 at a $1.975 billion funding level. Since this Whittaker and Libby Perl. 19 42 U.S.C. §8623(a)(2)(A) (2003). 20 U.S. Department of Health and Human Services, Low Income Home Energy Assistance Program: Report to Congress for FY1987, p. 133. The statutory provision that provides for use of the old formula is 42 U.S.C. §8623(a)(3) (2003). 21 Since this language was enacted, Congress further provided that HHS could use regular LIHEAP funds appropriations for Training and Technical Assistance (P.L. 99-425), and it also authorized . It also authorized Leveraging Incentive Grants (P.L. 101-501) and the REACH option (P.L. 103-252103252) — both of which it generally funds out of regular LIHEAP funds. These debits on the regular funds account were not in place for FY1984. Because they affect the level of regular funds funds available for state grant allotments by a little more than $25 million, it is possible but not not certain that HHS would not implement the newer formula before a regular funds appropriation level reaches just above $2 billion. 15 See immediately previous footnote. CRS-11 Tier III. Forof approximately $2.0028 billion. 22 42 U.S.C. §8623(a)(3) (2003). CRS-13 Tier III. The Tier III formula applies to funding levels at or above $2.25 billion, a Tier III rate is applied. The Tier III rate uses the Tier II methodology to distribute funds, but adds a second hold-harmless requirement, a hold harmless rate. States that would receive less than 1% of a $2.25 billion appropriation must be allocated fundshave their funds allocated using the rate they that would have experienced at been used at a hypothetical $2.14 billion appropriation (if this rate is greater than the calculated rate at $2.25 billion). In both the Tier II and Tier III rates, a state will not be allocated less funds than the state received under the Tier I distribution as it was in effect in FY1984 (had the appropriation level been $1.975 billion). The Tier III distribution, however, effectively ensures that (given the required increase in LIHEAP funding) state LIHEAP programs must receive a state-specific minimum share (or rate) of the total funding. (See Table 4 below.) Table 4. Level of Funds Appropriated and Resulting Distribution Factors for LIHEAP Regular Funds Funds Statutory directive appropriated Tier I P.L. 97-35 created $1.975 billion LIHEAP and effectively or less directed that funds be distributed as they had been in FY1981 for a predecessor energy assistance program. Tier II more than $1.975 billion but less than $2.25 billion Tier III $2.25 billion or more Data used Heating degree days (squared), residential energy expenditures, home heating expenditures, and number of low-income households. (These data are not updated and remain fixed at the values that were current circa 1980.) Heating degree days, At this funding level, P.L. 98-558 amended the cooling degree days, heating expenditures, LIHEAP statute to cooling expenditures, type provide that state allotments be determined of energy used, cost of energy, number of lowaccording to “expenditures for home income households and the method of heating or energy by low-income cooling used by lowhouseholds” and based income households. (Data on the “most recent used are to be current.) satisfactory data” available to HHS. Same as for Tier II. Same as for Tier II. Source: Table prepared by the Congressional Research Service. Hold harmless Not applicable. States with greatest proportionate increase in their rate of funding must have their share of funding (or rate) reduced to ensure that no state receives less money than it would have received for FY1984 (if the appropriation that year had been $1.975 billion). Same as for Tier II; in addition, any state that would receive less than 1% of a total $2.25 billion appropriation must be allocated funds at the rate it would have received at a $2.14 billion appropriation (if this rate is greater than it would be at $2.25 billion). CRS-12 effect in FY1984 (had the appropriation level been $1.975 billion). Contingency Funds. The statute currently provides an annual authorization of $600 million for LIHEAP contingency funds. (contingency funds are authorized indefinitely).23 Appropriated contingency funds may only be released at the discretion of HHS and may be allocated to one or more states based on their needs. The statute authorizes the appropriation of contingency funds “to meet the additional home energy assistance needs of one or more States arising from a natural disaster or other emergency.” The term “emergency” is defined in the LIHEAP statute to include 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.” Leveraging Incentive and REACH Funds. In 1990, P.L. 101-501, amended amended the program 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 non-federal resources for their LIHEAP programs.24 Such resources might include negotiated lower energy rates for lowincomelow-income households or separate state funds. States are awarded incentive funds in a given fiscal year based on a formula that takes into account their previous fiscal year success in securing non-federal resources for their energy assistance program. In 1994 (P.L. 103-252) the statute was further amended to provide that of any incentive funds 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 efficiency of energy usage among lowincomelow-income families and to reduce those families’ vulnerability to homelessness and other health and safety risks due to high energy costs. Although theThe funding authorization for Leveraging Incentive and REACH grants is separate, in practice, Congress has funded these from regular funds, and the programs were not reauthorized in P.L. 109-58. In practice, however, Congress has funded these initiatives at $22 million to $30 million with dollars set-aside out of annual regular fund appropriations. Other Funds. States are allowed to carry over unused funds from a previous fiscal year (limited to 10% of funds awarded a state). A diminishing amount of money may also be available from previously settled claims of price control violation 23 42 U.S.C. §8621(e) (2003). 24 42 U.S.C. §8621(d) (2003). CRS-14 by oil companies.25 by oil companies.16 Finally states have the authority to transfer funds to LIHEAP from certain other federal block grants (including TANF). Legislative History Since it was created by the Low Income Home Energy Assistance Act of 1981 (Title XXVI of P.L. 97-35), the LIHEAP program has been reauthorized or amended sixseven times. The legislation and some of the significant changes made are briefly discussed in the following paragraphparagraphs. In 1984, P.L. 98-558, established a new formula by which regular LIHEAP funds are to be distributed in every year (after FY1985) in which regular 16 LIHEAP Report to Congress, FY2002, pp. 11-12. For FY2002 $4.9 million in oil overcharge funds was obligated by one state. CRS-13 appropriations exceed $1.975 billion. (This level of funding was exceeded in FY1986 FY1986 but has not been reached in any year since then.) In 1986, P.L. 99-425 extended the program with few changes. In 1990, P.L. 101-501 created the Incentive Program for Leveraging Non-Federal Resources and authorized a July to June program year (or forward funding) for LIHEAP to allow state program directors to plan for the fall/winter heating season with knowledge of available money. (This program year language was subsequently removed, although the statute now states that money appropriated in a given fiscal year is to be made available for obligation in the following fiscal year. Congress last provided advance appropriations for LIHEAP in the FY2000 appropriations cycle.) In 1993, P.L. 103-43 extended the authorization of LIHEAP for one year but made no other changes. In 1994 (P.L. 103-252) Congress stipulated that LIHEAP benefits and outreach activities target households with the greatest home energy needs (and costs), and it enacted a separate and permanent contingency funding authorization of $600 million for each fiscal year. The 1994 law also established the competitive REACH grant option. In 1998, P.L. 105-285 authorized annual regular funding for each of FY2002-FY2004 at $2 billion and made explicit a wide variety of situations under which HHS is authorized to release LIHEAP contingency funds. Program Authorization. LIHEAP funding authorization expired with FY2004. As noted in Recent Developments section above, the House recently passed omnibus energy legislation that would raiseFinally, in 2005 the Energy Policy Act (P.L. 109-58) reauthorized the program and raised the LIHEAP regular funds authorization level to $5.1 billion, . It also explicitly permitpermitted the purchase of renewable fuels as part of providing LIHEAP assistance, require assistance; required the Department of Energy to report on use of renewable fuels in provision of LIHEAP aid, require; required HHS to report (within one year of the legislation’s enactment) on ways that the program could more effectively prevent loss of life due to extreme temperatures, and would permit the use of certain revenue received by the federal treasury as a consequence of drilling in the Arctic National Wildlife Refuge to be appropriated for LIHEAP. Legislation to reauthorize LIHEAP was passed in both chambers of Congress during the 108th Congress, however no final reauthorization language became part of law. (See Table 5 at the end of this report for a summary of major provisions in those bills.) Issues Congress has shown interest in adjusting the method by which contingency funds are released, in revisiting the formula used to distribute regular LIHEAP funds, and in performance measurement. The following discussion focuses primarily on activities in the 108th Congress. As no final reauthorization language was enacted, these issues are presumed to be of continued interest. Release of Contingency Funds. Contingency funds are appropriated by Congress “to meet the additional home energy assistance needs of one or more States arising from a natural disaster or other emergency.” Current law provides a broad definition of such emergencies, but gives HHS (acting on behalf of the President) sole discretion to determine when events warrant the release of contingency funds, CRS-14 what states (or state) are to receive contingency funds, and under what formula this money will be distributed.17 Depending on the language used in the appropriations act, contingency funds that are not released by HHS in the fiscal year for which they are appropriated may revert to the federal treasury at the end of the fiscal year (expire), or they may remain available for a specified number of years or until expended. As passed by the Senate in February 2004, S. 1786 (108th Congress) would have amended current law to establish two conditions that would require HHS to release available contingency funds to affected states. Those conditions would be: (1) if there is an increase of at least 20% in the cost of home energy over the previous fiveyear average for a duration of a month or more in one or more states or regions; or (2) if one or more states experience hot or cold weather that is significantly more severe than average (i.e., the number of heating degree days or cooling days for a month is more than 100 above the 30-year average).18 This proposal is in keeping with the Senate HELP committee’s reported concern that “emergency funds appropriated in FY2001 and FY2002 were not distributed to States despite requests from Congress and Governors for the release of funds.” The committee report accompanying S. 1786 in the 108th Congress also encouraged HHS “to consider all factors defined in the statute” when making decisions about release of contingency funds.19 Current law provides that “a significant increase in home energy disconnections” may be considered an emergency that warrants release of contingency funds. In keeping with its desire for HHS to “monitor arrearage trends nationwide” and to consider a significant increase in energy utility arrearages as part of this “disconnection criteria” for releasing contingency funds, S. 1786 (108th Congress) would have also required HHS to develop a protocol for states to collect information from energy vendors on a range of residential customer statistics, including overall statistics on the number of disconnections for nonpayment and the number of reconnections. The protocol would also need to establish a method for gathering information about the accounts of households eligible for energy assistance, including the total number of such accounts and how many are past due, the number that have been issued disconnection notices, the total past due amount owed, the number determined uncollectible and the energy burden of these accounts. 17 P.L. 105-285, which last reauthorized LIHEAP, defined the term “emergency” broadly and added a “natural disaster” as a possible cause for the release of LIHEAP contingency funds. In explaining these changes, S.Rept. 105-256 noted that the changes were intended to clarify when contingency funds may be released and particularly to assert that emergencies need not be temperature driven. 18 A heating degree day equals the number of degrees below 65°F in a given day. For example, if the average temperature on a given day is 55°F, then the number of heating degree days for that day is 10. A cooling degree day equals the number of degrees above 65°F in a given day. For example, if the average temperature for the day is 75°F, then the number of cooling degree days for that day is 10. 19 U.S. Congress, Senate Health, Education, Labor and Pensions Committee, Poverty Reduction Act of 2003: Report to Accompany S. 1786, 108th Cong., 2nd Sess., S.Rept. 108210, p. 15. CRS-15 A description of the protocol would need to be included in a larger report on LIHEAP that S. 1786 would have required HHS to complete and submit to Congress within two years of the legislation’s enactment. Echoing the HELP Committee report language, the conference report accompanying the FY2004 omnibus spending measure (H.Rept. 108-401) notes that arrearages are a precursor to energy utility disconnections and that an increase in such disconnections is one criteria for the release of emergency funds. Like the HELP committee, the conferees “urge” HHS to consider a significant increase in arrearage rates as part of the disconnection criteria for releasing emergency funds. Responding to the conferees in its FY2005 budget justifications, the Administration states that it “has examined the possibility of collecting national arrearage and disconnection information in the past and determined that this kind of data was not readily available.”20 At the same time, it notes that many states work with utility companies on behalf of low-income households to obtain reduction in arrearages or forgiveness where possible, and further, that states may also use the LIHEAP program to provide budget counseling services that might help these households “effectively manage their resources to avoid future disconnections.”21 The conferees to the FY2004 omnibus appropriations act also “urge” HHS to make available “regular information on significant, unanticipated changes in home heating and cooling costs” and “quarterly reports on significant variances in regional weather data and fuel prices” to the LIHEAP-authorizing and the appropriations committees and state that “such reports should be provided within 30 days of the end of any fiscal quarter in which LIHEAP contingency funds remain available for obligation.” And, finally, should funds be released, the conferees seek a “detailed explanation of the factors used to determine the distribution of funds.” And they also remind HHS that it is “expect[ed]” to “consider the factors identified in the statute when making decisions about the release of funds,” and request that the House and Senate Appropriation Committees receive formal notification in advance of any release of contingency funds.22 In its response to these statements, HHS agrees to provide quarterly data, as requested “ to the extent there are significant variances in regional and fuel data” and during any period when contingency funds remain available for distribution.23 20 The Administration also states that a 1986 GAO report concurred with this finding. At the same time, HHS has recently funded research into the issue of collecting these data. The study authors cite obstacles but propose ways to begin to ensure their availability. See John Howat, Jerry McKim, Charlie Harak, and Olivia Wein, “Tracking the Home Energy Needs of Low Income Households Through Trend Data on Arrearages and Disconnections,” May 2004. Available online at [http://www.neada.org/pubs/Tracking_the_Need.pdf]. 21 U.S. Department of Health and Human Services, Administration for Children and Families, “FY2005: Justification of Estimates for Appropriations Committees,” p. F-6. 22 Current law requires HHS to notify “Congress,” and this notification is sent to the House Education and Workforce Committee and the Senate Health, Education, Labor and Pensions Committee. 23 U.S. Department of Health and Human Services, Administration for Children and Families, “FY2005: Justification of Estimates for Appropriations Committees,” p. F-7. CRS-16 LIHEAP Formula. As passed by the House on April 21, 2005, H.R. 6 (109th Congress) would require HHS to report to Congress on how LIHEAP “could be used more effectively to prevent loss of life from extreme temperatures.” This same language was included in the conference agreement to the Energy Policy Act of 2003 (H.R. 6 in the 108th Congress), which was not enacted. The requirement that such a report be made was ; and allowed the Secretary of the Interior, when disposing of in-kind oil and gas royalties taken from oil and gas leases, to grant a preference for the purpose of providing additional resources to support federal lowincome energy assistance programs. 25 LIHEAP Report to Congress, FY2003, p. 11. For FY2002, $3.3 million in oil overcharge funds was available to two states. CRS-15 Issues LIHEAP Formula. The Energy Policy Act of 2005 requires HHS to report to Congress on how LIHEAP “could be used more effectively to prevent loss of life from extreme temperatures.” Neither the act nor the conference report directs how HHS should fulfill this requirement. The requirement that such a report be made was first included in House legislation (H.R. 1644) in the 108th Congress and, according to the accompanying committee report, was intended to “assist the [HHS] Secretary in in developing a more accurate formula allocation methodology” to better meet the home home energy assistance needs of “vulnerable populations.” At the time, the House Energy Energy Committee report asserted that any formula developed, should use the best statistical data and models now available; be a simple, easy-to-understand science-basedsciencebased mechanism that considers state-level expenditures for low-income home heating and cooling needs; and include annually updated, state-level heating and cooling degree day and fuel price information.24 Although the Senate-passed version of H.R. 6 in the 108th Congress did not include this language, Senate conferees agreed to this report. Ultimately however, due to provisions unrelated to LIHEAP, the Senate choose not to act on the 2003 conference agreement. However, S. 1786 (108th Congress), which the Senate passed in February 2004, would also have required HHS to report to Congress on several issues that might be relevant to formula determinations. These include an analysis of the public health and safety threats of hypothermia and hyperthermia due to lack of home heating or cooling, including morbidity, mortality and decrease in caloric intake; an analysis of the effect of standard of housing and housing age on energy costs to low-income households; and an evaluation of regional differences in cost-ofliving and the ability of low-income families to meet home energy requirements. Performance Measurement. S. 1786 (108 th Congress) would have required HHS to evaluate the performance of LIHEAP with regard to who the program serves, the benefits of the program to recipients, and the ability of the program to reduce utility arrearage and shut-offs among low-income households. Findings of the evaluation would have been part of a required report due to Congress within two years of the legislation’s enactment. The bill also would have required the GAO to conduct a new evaluation of the REACH option under LIHEAP.25 The President’s FY2005 and FY2006 budgets include a request for $500,000 to conduct a feasibility study regarding a nationally representative evaluation of LIHEAP program operations. Both of those budgets also include a program performance rating for LIHEAP. It is rated as a program for which “results [are] not demonstrated.” According to these reviews, the program purpose is clear, it addresses a specific existing need, and has a number of additional strengths including effective targeting of intended beneficiaries. However, the review notes that the program’s “effectiveness or efficiency” 24 U.S. Congress, House Energy and Commerce Committee, Energy Policy Act of 2003: Report to Accompany H.R. 1644, 108th Congress, 1st sess., H.Rept. 108-65, Part 1, p. 145. 25 In 2001 the GAO released an earlier requested report on the REACH option. U.S. General Accounting Office, Residential Energy Assistance: Effectiveness of Demonstration Program as Yet Undetermined, GAO-01-723, Aug. 2001. CRS-17 is hampered by the current law formula, it has limited and only recently developed outcome measures, and there have been no independent evaluations (of “sufficient scope and quality”) that demonstrate the program’s effectiveness. The Administration efforts to develop new performance measures, generally related to meeting the statutory goal of serving low income households with high energy burdens and including certain vulnerable populations (disabled, age 5 or younger, and age 60 or older) have been hampered by data concerns.26 26 See U.S. Department of Health and Human Services, Administration for Children and Families FY 2005 Budget Justifications, pp. M-137-140 and U.S. Department of Health and Human Services, Administration for Children and Families, FY2006 Budget Justifications, pp. M-74-M-78. CRS-18 Table 5. Major Provisions of LIHEAP Reauthorization Language in the 109th and 108th Congresses 109th Congress Provision Current law Energy Policy Act of 2005, H.R. 6 House-passed 108th Congress Energy Policy Act of 2003, H.R. 6 House-passeda S. 1786 (as it passed the Senate) Senate-passed Regular funds authorization (Expired) Set at $2 billion for FY02-FY04. Set at $5.1 billion for FY05-FY07 Contingency funds authorized Technical Assistance, and training set-aside authorized Funds for leveraging (non-federal resources) incentive authorized Residential Energy Assistance Challenge (REACH) Option Indefinite authorization of $600,000 (under certain conditions). HHS may set aside up to $300,000 from the regular funds appropriated for training and technical assistance. No provision Set at $3.4 billion for Set at $3.4 billion for Set at $3.4 billion for FY04FY04-FY06 FY03-FY05 FY06 and make such sums as necessary for FY07-FY10 No provision Set at $1 billion No provision No provision No provision (Expired) $50 million for FY99-FY04 provided No provision the regular funds appropriation totals at least $1.4 billion; set at $30 million for those years if regular funding falls below $1.4 billion.b No provision State may apply for special grants to plan, implement and evaluate special initiatives designed to minimize health and safety risks resulting from high energy burdens on low income Americans; prevent homelessness as a result of inability to pay energy bills; increase efficiency of energy usage by low income families and to target energy assistance to individuals who are most in need. HHS is authorized to set-aside up to 25% of funds made available for the leveraging incentive for this purpose and, out of those funds must reserve some money to make grants to states who will implement and evaluate model energy efficiency education services. No provision HHS could set-aside up to $750,000 from the regular funds appropriated No provision No provision (but see funding authorized for HHS report on various program aspects, below). Extends same level of funding authorization through FY2010. No provision No provision The Government Accountability Office (GAO) must conduct an evaluation of REACH and also study the state evaluations of their REACH initiatives, including those concerning model energy efficiency education services. Within two years of the enactment of the legislation, the report is to be submitted to the Senate Health Education Labor and Pensions and the House Education and Workforce committees. CRS-19 109th Congress Provision Current law Energy Policy Act of 2005, H.R. 6 House-passed Other federal funding sources Very limited funds remain available for distribution by the Department of Energy to certain states and insular areas as a result of the settlement oil price overcharges cases (brought under the Emergency Petroleum Allocation Act of 1973).c Use of funds States are to use funds to provide assistance to eligible households for meeting home energy needs. Department of Energy Report (DOE) Not applicable Permits bonus funds received by federal treasury related to leasing drilling rights in the Arctic National Wildlife Refuge to be appropriated for LIHEAP As part of providing home energy assistance, LIHEAP funds may be used to purchase renewable fuels, including bio-mass. DOE must report to Congress on the use of renewable fuels in providing assistance under LIHEAP 108th Congress Energy Policy Act of 2003, H.R. 6 House-passeda S. 1786 (as it passed the Senate) Senate-passed Permits bonus funds No provision received by federal treasury related to leasing drilling rights in the Arctic National Wildlife Refuge to be appropriated for LIHEAPa No provision No provision No provision No provision No provision No provision No provision CRS-20 109th Congress Provision Current law Energy Policy Act of 2005, H.R. 6 House-passed 108th Congress Energy Policy Act of 2003, H.R. 6 House-passeda S. 1786 (as it passed the Senate) Senate-passed Special Department of Health and Human Services (HHS) Report Not applicable HHS must report to Congress on how LIHEAP can more effectively prevent loss of life from extreme temperatures (within one year of enactment) No provision HHS must report to Congress on how LIHEAP can more effectively prevent loss of life from extreme temperatures (within one year of enactment) Release of contingency funds LIHEAP contingency funds may be released to one or more states experiencing an emergency — at the discretion of HHS. Emergency is broadly defined and includes natural disasters; significant home energy supply shortages, disruptions or costs increases; significant home energy disconnections; significant increases in use of public benefit programs, or in unemployment; or “an event meeting such criteria as [HHS] may determine to be appropriate. No provision No provision No provision HHS must evaluate LIHEAP performance; develop a protocol for states to collect data on certain home energy disconnections, past due accounts, etc; analyze public health and safety threats related to lack of home energy; analyze certain housing and regional cost of living factors as they affect the ability of low-income households to meet home energy needs; determine impact of using an eligibility cut off of 60% of state median income (due within 24 months; authorizes “such sums as necessary” in FY04-05 to carry out this study). HHS must release contingency funds to affected areas if it determines that in one or more states or regions 1) there is an increase of at least 20% in the cost of home energy over the previous five-year average for a month or more; or 2) that the number of heating degree days or cooling days for a month was more than 100 above the 30year average. CRS-21 Source: Table prepared by Congressional Research Service (CRS) based on legislation in the 109th and 108th Congresses. a. With one exception (noted in the following sentence), the provisions in this column were included in both the initial House-passed H.R. 6 (108th Congress) and the House-approved conference agreement to that legislation. The exception is the provision that would have allowed bonus funds received by the federal treasury as a result of leasing oil drilling rights in the Arctic National Wildlife Refuge to be appropriated to HHS for distribution via LIHEAP. It was included in the first House-passed H.R. 6 (108th Congress) but was not included in the House-passed conference agreement on that bill. (The conference agreement, which was not acted on by the Senate and was thus not enacted, would not have permitted drilling in the ANWR). b. In practice, Congress has not appropriated funds for these leveraging incentive grants separately but has instead provided that a certain amount of the regular LIHEAP funds appropriation (typically $27 million in recent years) are to made available for this purpose. c. These oil overcharge funds, which have been held in escrow and distributed by the Department of Energy, are nearly exhausted. For FY2002 (most recent year for which these data are available) a total of two states reported spending just under $5 million in these funds for their LIHEAP programs. CRS-22 Table 6. LIHEAP Funding by State, FY2002 to FY2005 (Dollars in millions) State TOTAL funds distributeda (regular and contingency) FY2002 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania 14.3 6.4 8.1 11.0 76.5 28.8 36.7 5.0 5.7 22.7 18.0 1.8 11.2 105.2 47.6 32.2 15.3 26.1 14.7 21.9 28.4 74.3 99.4 68.6 12.3 41.1 10.9 16.8 4.6 13.3 69.7 8.0 228.0 35.3 11.3 94.5 12.0 22.3 121.4 FY2003 16.1 7.8 7.2 12.3 86.1 30.2 43.8 5.8 6.3 25.9 20.3 2.0 11.8 109.6 50.2 35.5 16.1 26.1 16.5 28.6 32.1 86.1 104.9 77.5 13.8 43.8 11.9 17.4 3.7 16.9 78.7 9.1 260.1 37.5 12.6 98.1 13.6 23.8 136.7 Regular Contingency TOTAL allotmentb distributedc FY2004 15.4 7.5 6.9 11.8 82.4 28.9 40.2 5.3 6.2 24.5 19.4 1.9 11.1 104.5 47.3 33.5 15.4 24.6 15.8 25.1 30.8 80.4 105.0 71.5 13.2 41.7 11.2 16.6 3.5 15.2 74.5 8.7 243.4 33.6 12.4 98.4 13.0 21.8 130.9 FY2005 15.9 8.7 7.1 12.2 84.9 29.8 38.9 5.2 6.0 25.2 20.0 2.0 11.1 107.7 48.8 34.6 15.9 25.4 16.3 24.3 29.8 77.8 101.7 73.7 13.7 43.0 11.6 17.1 3.6 14.7 72.1 8.9 235.6 34.5 12.1 95.3 13.4 22.7 126.8 2.0 1.4 0.6 1.3 6.8 2.6 7.9 1.1 0.6 2.9 2.5 0.2 1.1 9.5 5.1 4.3 1.5 2.7 1.5 6.3 4.4 14.1 10.9 10.3 1.9 5.0 1.2 1.9 0.3 3.5 11.8 1.0 42.3 6.1 1.9 9.4 1.4 2.3 18.7 17.9 10.1 7.7 13.5 91.7 32.4 46.8 6.2 6.7 28.1 22.5 2.2 12.2 117.2 53.9 38.9 17.4 28.1 17.8 30.6 34.2 91.9 112.5 84.0 15.6 48.1 12.8 19.0 4.0 18.3 83.9 9.9 277.9 40.6 14.0 104.7 14.7 25.0 145.5 CRS-23 TOTAL funds distributeda (regular and contingency) State FY2002 Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming FY2003 Regular Contingency TOTAL allotmentb distributedc FY2004 FY2005 12.3 13.3 9.4 23.2 37.8 13.2 9.9 35.8 32.9 16.3 62.4 5.3 14.2 13.4 10.4 26.4 42.5 13.8 12.6 39.1 37.7 17.4 69.5 5.5 13.2 12.3 9.6 24.9 40.7 14.0 11.4 37.5 35.4 17.4 64.3 5.2 12.8 12.7 9.9 25.7 42.0 13.6 11.0 36.3 36.5 16.8 66.3 5.3 2.4 1.9 1.7 2.6 4.2 1.1 2.7 5.4 3.4 1.7 9.0 0.5 15.1 14.6 11.6 28.3 46.2 14.7 13.8 41.7 39.9 18.5 75.3 5.9 Subtotal $1,753 $1,939 $1,840 $1,837 $247 $2,084 Tribesd Territoriese Leveraging/REACHf Training/ Tech. Asst.g 16.9 2.3 27.5 0.3 19.3 2.5 27.3 0.3 19.0 2.5 27.3 0.3 17.6 2.5 27.3 0.3 2.5 0.3 0.0 0.0 20.1 2.9 27.3 0.3 TOTAL $1,800 $1,988 $1,889 $1,885 $250 $2,135 information.26 Table 4. LIHEAP Funding by State, FY2003 to FY2006 (Dollars in millions) State TOTAL funds distributeda (regular and contingency) FY2003 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland 26 16.1 7.8 7.2 12.3 86.1 30.2 43.8 5.8 6.3 25.9 20.3 2.0 11.8 109.6 50.2 35.5 16.1 26.1 16.5 28.6 32.1 FY2004 15.4 7.5 6.9 11.8 82.4 28.9 40.2 5.3 6.2 24.5 19.4 1.9 11.1 104.5 47.3 33.5 15.4 24.6 15.8 25.1 30.8 Regular Contingency TOTAL allotmentb distributedc FY2005 19.9 10.1 7.7 13.5 91.7 32.4 46.8 6.2 6.7 29.6 22.5 2.2 12.2 117.2 53.9 38.9 17.4 28.1 29.8 30.6 34.2 FY2006 16.664 7.440 7.448 12.796 89.287 31.342 40.920 5.431 6.355 26.527 20.979 2.113 11.642 113.259 51.274 36.343 16.678 26.686 17.144 25.541 31.332 0.658 17.321 0.394 7.834 0.236 7.684 0.571 13.367 4.409 93.696 1.674 33.017 2.304 43.224 0.272 5.703 0.314 6.668 0.256 26.783 0.856 21.835 0.012 2.125 0.382 12.024 6.560 119.819 2.652 53.926 2.040 38.384 0.923 17.601 0.972 27.659 0.661 17.805 1.540 27.080 1.512 32.844 U.S. Congress, House Energy and Commerce Committee, Energy Policy Act of 2003: Report to Accompany H.R. 1644, 108th Congress, 1st sess., H.Rept. 108-65, Part 1, p. 145. CRS-16 TOTAL funds distributeda (regular and contingency) State FY2003 Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming FY2004 Regular Contingency TOTAL allotmentb distributedc FY2005 FY2006 86.1 104.9 77.5 13.8 43.8 11.9 17.4 3.7 16.9 78.7 9.1 260.1 37.5 12.6 98.1 13.6 23.8 136.7 14.2 13.4 10.4 26.4 42.5 13.8 12.6 39.1 37.7 17.4 69.5 5.5 80.4 105.0 71.5 13.2 41.7 11.2 16.6 3.5 15.2 74.5 8.7 243.4 33.6 12.4 98.4 13.0 21.8 130.9 13.2 12.3 9.6 24.9 40.7 14.0 11.4 37.5 35.4 17.4 64.3 5.2 91.9 112.5 84.0 27.4 48.1 12.8 19.0 4.0 18.3 83.9 9.9 277.9 40.6 14.0 104.7 14.7 25.0 145.5 15.1 14.6 11.6 28.3 46.2 14.7 13.8 41.7 39.9 18.5 75.3 5.9 81.820 106.792 77.469 14.350 45.240 12.178 17.970 3.809 15.493 75.798 9.392 247.980 36.319 12.174 100.195 14.008 23.880 133.273 13.435 13.318 10.410 27.033 44.144 14.285 11.613 38.166 38.367 17.660 69.733 5.626 4.655 6.650 4.241 0.622 2.184 0.595 0.980 0.135 0.913 4.518 0.524 14.984 1.253 0.535 5.436 0.693 0.516 7.653 0.842 0.412 0.517 0.776 1.584 0.834 0.680 1.346 0.745 0.725 3.875 0.291 86.475 113.442 81.710 14.972 47.424 12.7730 18.950 3.944 16.406 80.316 9.916 262.964 37.571 12.709 105.630 14.701 24.396 140.926 14.277 13.730 10.928 27.809 45.728 15.119 12.293 39.512 39.112 18.385 73.608 5.917 Subtotal Tribesd Territoriese Leveraging/REACHf Training/Tech. Asst.g $1,939 19.3 2.5 27.3 0.3 $1,840 19.0 2.5 27.3 0.3 $2,111 20.1 2.9 27.3 0.3 $1,929 20.702 2.644 27.225 .297 $98.910 0.954 0.135 0.0 0.0 $2,028 21.656 2.779 27.225 .297 TOTAL $1,988 $1,889 $2,162 $1,980 $100 $2,080 Source: Table compiled by the Congressional Research Service (CRS) based on U.S. Department of Health and Human Services (HHS) data. a. The totals shown in these columns include regular fund allocations to states (net of the direct awards to tribes) and any contingency funds awarded to the state in that year. In FY2002 the regular funds appropriation was $1.700 billion and HHS distributed $100 million in contingency funds to 33 states and the District of Columbia that experienced extreme heat. In FY2003 the regular funds appropriation was $1.788 billion and HHS distributed $200 million in contingency funds to all states (for higher fuel costs). In FY2004 the regular funds appropriation was $1,.789 billion and HHS distributed $99.4 million in contingency funds to all states (because of higher CRS-17 b. c. d. e. f. g. fuel costs — with a greater share of the funding awarded to 19 states, including the District of Columbia, that also experienced extreme cold). b. LIHEAP funds are released on a quarterly basis. As of early July 2005, all of the FY2005 regular funding have been distributed. c. This column shows the amount of FY2005 contingency funds released as of mid-July 2005. As of that date, HHS had distributed $250 million. An additional $46.7 million in FY2005 contingency funds remain available for release until expended. d. In FY2005, the regular funds appropriation was $1.885 billion, and HHS distributed $250 million to all states, and $27.25 million to four states (Alabama, Florida, Louisiana and Mississippi) after Hurricane Katrina. Includes 1% rescission in P.L. 109-148. LIHEAP funds are released on a quarterly basis. This column shows the amount of FY2006 contingency funds released. The total available contingency funds includes $20.75 million in FY2005 contingency funds, and $183 million appropriated in P.L. 109-149. This funding is made directly available to or for tribes but is reserved out of a given state’s allotment amount. As prescribed in the statute, the tribal set-aside from a state gross allotment is based on tribal households in that state. e. The statute provides that HHS must set-aside not less then one-tenth of 1% and not more than onehalf of 1% for use in the territories (American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and the U.S. Virgin Islands). f. The statute provides a separate funding authorization for competitive grants under the leveraging incentive program (designed to encourage states to increase non-federal support for energy CRS-24 assistance). It also provides that up to 25% of any leveraging funds made available may be reserved for competitive REACH grants (for state efforts to increase efficient use of energy among low-income households and to reduce their vulnerability to homelessness and other problems due to high energy costs). The Congress has in recent years stipulated that a certain portion of the LIHEAP regular funds be set aside for leveraging grants and, of this amount, HHS has reserved 25% for REACH grants. g. The statute provides that HHS may reserve up to $300,000 for making grants or entering into contracts with states, public agencies, or private nonprofits that provide training and technical assistance related to achieving the purposes of the LIHEAP program. CRS-25 Table 75. LIHEAP Funding: FY1982 to FY2006FY2007 (Dollars in thousands) Regular Fundsa Fiscal year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 President’s request $1,400,000 1,300,000 1,300,000 1,875,000 2,097,765 2,097,642 1,237,000 1,187,000 1,100,000 1,050,000 1,025,000 1,065,000 1,507,408 1,475,000 1,319,204 1,000,000 1,000,000 1,300,000 1,400,000 1,400,000 1,400,000 1,400,000 1,700,000 1,800,500g 1,800,000g Authorized $1,875,000 1,875,000 1,875,000 2,140,000 2,275,000 2,050,000 2,132,000 2,218,000 2,307,000 2,150,000 2,230,000 ssanb ssanb 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 ssanb ssanb 2,000,000 2,000,000 2,000,000 None None Contingency Fundsa Appropriated $1,875,000 1,975,000 2,075,000 2,100,000 2,100,000 1,825,000 1,531,840 1,383,200 1,443,000 1,415,055 1,500,000 1,346,030 1,437,402 1,319,202 900,000 1,000,000 1,000,000 1,100,000 1,100,000 1,400,000 1,700,000 1,788,300e 1,789,380 1,884, 799 Appropriated — — — — — — — — — 195,180 300,000 595,200 600,000 600,000 180,000 420,000 300,000 300,000 900,000 600,000 300,000 0 99,410 297,600 Distributed — — — — — — — — — 195,180 0 0 300,000 100,000 180,000 215,000 160,000 175,299 744,350c 455,650 100,000d 200,000f 99,410 250,000h TOTAL Distributed $1,875,000 1,975,000 2,075,000 2,100,000 2,100,000 1,825,000 1,531,840 1,383,200 1,443,000 1,610,235 1,500,000 1,346,030 1,737,402 1,419,202 1,080,000 1,215,000 1,160,000 1,275,299 1,844350c 1,855,650 1,800,000 CRS-18 Regular Fundsa Fiscal year 2003 2004 2005 2006 2007 President’s request 1,400,000 1,700,000 1,800,500g 1,800,000g 1,782,000 Authorized 2,000,000 2,000,000 5,100,000 5,100,000 5,100,000 Contingency Fundsa Appropriated 1,788,300e 1,789,380 1,884,799 2,480,000 — Appropriated 0 99,410 297,600 681,000 — Distributed 200,000f 99,410 277,250 100,000 — TOTAL Distributed 1,988,300 1,888,790 2,162,050 2,080,000h — 1,988,300 1,888,790 2,134,799h Source: Table prepared by the Congressional Research Service (CRS) based on HHS data. a. Amounts listed under the Regular Funds heading are for regular funding only. In 1994, Congress enacted a permanent $600 million annual authorization for contingency funding. As shown, however, before this authorization contingency funds were sometimes made available. b. Such sums as necessary. c. President Clinton released $400 million of these FY2000 contingency funds in late Sept. 2000 making it effectively available to states in FY2001. d. These funds were distributed out of the total FY2002 contingency appropriation (P.L. 107-116). With the end of FY2002, the remaining $200 million of these contingency funds expired. e. The final FY2003 appropriations act (P.L. 108-7) included $1.688 billion in new regular funds and converted into regular funds $100 million of remaining contingency funds originally appropriated in FY2001 (P.L. 107-20). f. These funds were distributed out of contingency dollars appropriated as part of the FY2001 supplemental (P.L. 107-20). That law provided that the funds were “available until expended.” Congress subsequently converted some of these dollars into regular funds (see tablenote e). g. Of this amount the President requestsrequested that $500,000 be set aside for a national evaluation. h. The amount of contingency funds distributed in FY2005 is shown as of mid-July 2005; the total distributed amount for FY2005 includes all regular funds appropriation that are distributed on a quarterly basis.As of March 22, 2006, funds appropriated in P.L. 109-204 had not been distributed. crsphpgw