The LIHEAP Formula

Changes from November 19, 2008 to May 11, 2009

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Order Code RL33275.

The LIHEAP Formula:
 Legislative History and 
Current Law

Updated November 19, 2008


Libby Perl
Analyst in Housing Policy
Domestic Social Policy Division

 The LIHEAP Formula:
May 11, 2009

Congressional Research Service
7-5700
www.crs.gov
RL33275

CRS Report for Congress
Prepared for Members and Committees of Congress
c11173008

 .
The LIHEAP Formula: Legislative History and Current Law


Summary
The Low Income Home Energy Assistance Program (LIHEAP) provides funds
 to states, the 
District of Columbia, U.S. territories and commonwealths, and Indian
 tribal organizations 
(collectively referred to as grantees) primarily to help lowincomelow-income households pay home energy 
expenses. The LIHEAP statute provides for
 two types of funding: regular funds (sometimes 
referred to as block grant funds) and
 emergency contingency funds. Regular funds are allocated to 
grantees based on a
 formula, while contingency funds may be released to one or more grantees at the

the discretion of the Secretary of the Department of Health and Human Services based
on  on
emergency need.
Regular LIHEAP funds are allocated to the states according to a formula that
 has a long and 
complicated history. (Tribes receive funds based on their number of
 federally eligible LIHEAP 
households compared to the total number in the state,
 whereas territories receive a set percentage 
of total LIHEAP regular funds.) In 1980,
 Congress created the predecessor program to LIHEAP, 
the Low Income Energy
 Assistance Program (LIEAP) as part of the Crude Oil Windfall Profits 
Tax Act (P.L.
 96-223). Because Congress was particularly concerned with the high costs of
heating, funds under LIEAP were distributed according to a multi-step formula that
benefitted  benefitted
cold-weather states. In 1981, Congress enacted LIHEAP as part of the
 Omnibus Budget 
Reconciliation Act (P.L. 97-35), replacing LIEAP. However, the
 LIHEAP statute specified that 
states would continue to receive the same percentage
 of regular funds that they did under the 
LIEAP formula.
When Congress reauthorized LIHEAP in 1984 as part of the Human Services
 Reauthorization Act 
(P.L. 98-558), it changed the program’s formula by requiring the
 use of more recent population 
and energy data and requiring that HHS consider both
 heating and cooling costs of low-income 
households (a change from the focus on the
 heating needs of all households). The effect of these 
changes meant that, in general,
 funds would be shifted from cold-weather states to warm-weather 
states. To prevent
 a dramatic shift of funds, Congress added two “hold-harmless” provisions to the

the formula. The result of these provisions is a current law, three-tiered formula
 (sometimes 
referred to as the “new” formula), the application of which depends on
 the amount of regular 
funds that Congress appropriates.
The Tier I formula is used to allocate funds when the total LIHEAP regular fund
 appropriation is 
less than or equal to the equivalent of a hypothetical FY1984
 appropriation of $1.975 billion. 
Above this level, funds are allocated according to
 Tier II of the formula, which includes a hold-harmlessholdharmless level to prevent certain states
 from losing LIHEAP funds. Finally, Tier III applies to 
appropriations at or above
 $2.25 billion, and includes a second hold-harmless provision, the hold-harmless rate.
holdharmless rate. Since FY1986, LIHEAP regular fund appropriations have exceeded the equivalent
of an FY1984 appropriation of $1.975 billion on three occasions: in FY2006, when
 the regular 
fund appropriation was $2.48 billion; in FY2008, when appropriations
 slightly exceeded the 
trigger; and in FY2009, when Congress directed that $840
 million be distributed according to the “new” LIHEAP formula.

 Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Predecessor Programs to LIHEAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Community Services Administration Energy Assistance Programs . . . . . . . 3
Low Income Energy Assistance Program (LIEAP) . . . . . . . . . . . . . . . . . . . . 6
The LIEAP Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Enactment of LIHEAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Continued Use of the LIEAP Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The 1984 LIHEAP Reauthorization: A New Formula . . . . . . . . . . . . . . . . 11
Formula Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Introduction of a Hold-Harmless Level . . . . . . . . . . . . . . . . . . . . . . . . 12
Introduction of a Hold-Harmless Rate . . . . . . . . . . . . . . . . . . . . . . . . . 12
LIHEAP Formula Statutory Language . . . . . . . . . . . . . . . . . . . . . . . . . 13
Determining LIHEAP Regular Fund Allotments Using the “New” Formula . . . 14
Calculating the New Formula Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Using the New Formula Rates to Allocate Funds to the States . . . . . . . . . . 17
Tier I: Below $1.975 Billion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Tier II: From $1.975 Billion up to $2.25 Billion . . . . . . . . . . . . . . . . 18
Tier III: At or Above $2.25 Billion . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Implementation of the “New” LIHEAP Formula . . . . . . . . . . . . . . . . . . . . 20
Appendix A: Estimated Appropriations to the States Under Various
Hypothetical Appropriation Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Appendix B: Further Depiction of How State Allotments
Depend Upon Appropriation Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appendix C: Actual LIHEAP Allocations to the States, FY2006-FY2009 . . . . . 28

List of Figures
Figure 1. Estimated Low Income Home Energy Assistance (LIHEAP)
Allocations at Various Hypothetical Appropriations Level for
Three Types of States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

List of Tables
Table 1. Select Energy Assistance Formulas, FY1975-FY1980 . . . . . . . . . . . . . . 6
Table 2. Distribution of Funds Under LIEAP . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 3. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, 2008 . . . . . . . . . . . . . . . . . . . 21

 Table A-1. LIHEAP Estimated State Allotments for Regular Funds
at Various Hypothetical Appropriation Levels . . . . . . . . . . . . . . . . . . . . . . 24
Table C-1. LIHEAP Actual State Regular Fund Allotments for
FY2006 through FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

 The LIHEAP Formula:
Legislative History and Current Law
Introduction
The Low Income Home Energy Assistance Program (LIHEAP) is a block grant
program administered by the Department of Health and Human Services (HHS)
under which the federal government gives annual grants to states, the District of
Columbia, U.S. territories and commonwealths, and Indian tribal organizations to
operate multi-component home energy assistance programs for needy households.1
Established in 1981 by Title XXVI of P.L. 97-35, the Omnibus Budget
Reconciliation Act, LIHEAP has been reauthorized and amended a number of times,
most recently in 2005, when P.L. 109-58, the Energy Policy Act, authorized annual
regular LIHEAP funds at $5.1 billion per year from FY2005 through FY2007.2
The federal LIHEAP statute has very broad guidelines, with almost all decisions
regarding the program’s operation made by the states. Recipients may be helped with
their heating and cooling costs, receive crisis assistance, have weatherizing expenses
paid, or receive other aid designed to reduce their home energy needs. Households
with incomes up to 150% of the federal poverty income guidelines or, if greater, 60%
of the state median income, are federally eligible for LIHEAP benefits. States may
adopt lower income limits, but no household with income below 110% of the poverty
guidelines may be considered ineligible. The most current HHS data show that an
estimated 5.3 million households received winter heating or winter crisis assistance
in FY2005 (the majority of LIHEAP funds pay for heating assistance).3
The LIHEAP statute provides for two types of program funding: regular funds
— sometimes referred to as block grant funds — and emergency contingency funds.
Regular funds are allotted to states on the basis of the LIHEAP statutory formula,
which was enacted as part of the Human Services Reauthorization Act of 1984 (P.L.
98-558).4 The way in which regular funds are allocated to states depends on the
amount of funds appropriated by Congress. The second type of LIHEAP funds,
emergency contingency funds, may be released and allotted to one or more states at

1

For additional information on LIHEAP, see CRS Report RL31865, The Low Income Home
Energy Assistance Program (LIHEAP): Program and Funding, by Libby Perl.

2

LIHEAP is codified at 42 U.S.C. §§8621-8630.

3

U.S. Department of Health and Human Services, Administration for Children and Families,
FY2005 LIHEAP Report to Congress, April 24, 2008, p. 20.

4

The formula section is codified at 42 U.S.C. §8623.

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the discretion of the President and the Secretary of HHS.5 The funds may be released
at any point in the fiscal year to meet additional home energy assistance needs created
by a natural disaster or other emergency.6
The remainder of this report discusses only the history and methods of
distributing regular LIHEAP funds.

Predecessor Programs to LIHEAP
The mid- to late-1970s, a time marked by rapidly rising fuel prices, also marked
the beginning of federal energy assistance funding for low-income households. The
first national program to help low-income households was created in early 1975 to
assist families with energy conservation primarily through home weatherization. This
assistance was provided through a new Emergency Energy Conservation Program
(EECP), enacted as part of the Headstart, Economic Opportunity, and Community
Partnership Act of 1974 (P.L. 93-644). The funds were administered by the
Community Services Administration (CSA), the successor agency to the Office of
Economic Opportunity, which was responsible for many of the programs created as
part of the 1964 war on poverty. Beginning in 1977, funds were also made available
through the CSA to help families directly pay for fuel (as opposed to weatherization
expenses) via a variety of programs. Each of these programs had in common a focus
on the need for heating assistance (versus cooling assistance).
Congress continued to appropriate funds for energy assistance programs through
FY1980, at which point a new program, the Low Income Energy Assistance Program
(LIEAP) was enacted as part of the Crude Oil Windfall Profits Tax Act of 1980 (P.L.
96-223). LIEAP, which was administered by the Department of Health and Human
Services (HHS), was funded for one year, FY1981, before the creation of LIHEAP.
Like the CSA programs, LIEAP emphasized heating over cooling needs. This
preference was reflected in both the CSA program formulas and the LIEAP set of
formulas, which used variables that benefitted cold-weather states to determine how
funds would be distributed. The LIEAP set of formulas continues to have relevance
for the way in which LIHEAP funds are distributed. This section of the report
describes these predecessor programs to LIHEAP and their distribution formulas.

5

Depending on how Congress appropriates them, contingency funds may remain available
for distribution in more than one fiscal year or they may expire with the fiscal year for which
they were appropriated.

6

The statutory definition of emergency includes a significant home energy supply shortage
or disruption, a significant increase in the cost of home energy, a significant increase in
home energy disconnections, a significant increase in participation in a public benefit
program, a significant increase in unemployment, or an event meeting such criteria as the
Secretary determines to be appropriate. 42 U.S.C. §8622.

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Community Services Administration
Energy Assistance Programs
On January 4, 1975, President Ford signed into law the Headstart, Economic
Opportunity, and Community Partnership Act of 1974 (P.L. 93-644), which
contained funds for a new program, called the Emergency Energy Conservation
Program (EECP). The program was to be administered by the Community Services
Administration (CSA), and its purpose was
to enable low-income individuals and families, including the elderly and the near
poor, to participate in energy conservation programs designed to lessen the
impact of the high cost of energy ... and to reduce ... energy consumption.

The law governing EECP listed a number of eligible activities in which states could
participate, including energy conservation and education programs; weatherization
assistance; loans and grants for the purchase of energy conservation technologies;
alternative fuel supplies; and fuel voucher and stamp programs. Despite the variety
of activities that could be funded through the program, the first CSA funding notice
regarding the program limited eligible activities to “winterizing” homes and to giving
emergency assistance “to prevent hardship or danger to health due to utility shutoff
or lack of fuel.”7 During the four years the EECP was funded, the majority of funds
were used for weatherization expenses.8
EECP funds were distributed to states via a formula that benefitted those states
with high heating costs. One formula variable in particular, a measure of “coldness”
called heating degree days, benefitted cold-weather states. Heating degree days
measure the extent to which a day’s average temperature falls below 65° Fahrenheit.
For example, a day with an average temperature of 50° results in a measure of 15
heating degree days. Because heating degree days are higher in cold weather states,
including the heating degree day variable in a formula favors states with greater
heating needs. Squaring the heating degree days magnifies this effect.9 The EECP
formula took the number of population-weighted heating degree days in each state,
squared them, and multiplied the result by the number of households in poverty that
owned their homes to determine how funds would be allocated.10 The CSA
7

Community Services Administration, “Character and Scope of Specific Community Action
Programs: Emergency Energy Conservation Program,” Federal Register, vol. 40, no. 145,
July 28, 1975, p. 31603.

8

See, for example, House Appropriations Committee, report to accompany H.R. 4877, the
FY1977 Supplemental Appropriations Act, 95th Cong., 1st sess., H.Rept. 95-68, March 11,
1977: “The funds in this program are used primarily to purchase materials to insulate the
homes of low-income families.”
9

For example, if a southern state experiences 700 heating degree days in a year and a
northern state experiences 7,000, the northern state has 10 times as many heating degree
days as the southern state. However, if both numbers are squared, the northern state has 100
times as many heating degree days as the southern state.

10

Community Services Administration, “Emergency Energy Conservation Program:
Submission of Funding Plans,” Federal Register, vol. 41, no. 208, October 27, 1976, p.
(continued...)

 CRS-4
acknowledged the emphasis on heating needs in its formula, stating that the FY1975
allocation “was heavily weighted to the coldest areas...”11 In the three fiscal years
that followed the first appropriation for the EECP, from FY1976 through FY1978,
the CSA changed somewhat the way in which it allocated funds to the states;
however, the factors continued to favor cold-weather states through use of either
heating degree days or heating degree days squared.12
The first year that Congress specifically appropriated funds for direct assistance
to help low-income households (those at or below 125% of poverty) pay their energy
costs (instead of funds that went primarily for weatherization and conservation
activities) was FY1977. The FY1977 Supplemental Appropriations Act (P.L. 95-26)
provided $200 million for a Special Crisis Intervention Program to be administered
by CSA. States could use funds to make direct payments to fuel providers on behalf
of low-income families lacking the financial resources to pay their energy bills. The
CSA directed states to target households where utilities had been shut off (or were
threatened with shut off) and who could prove dire need due to large energy bills.13
Although the law did not reserve funds exclusively for heating costs, the way in
which funds were allocated to the states emphasized heating need. Funds were
distributed to the states based on a formula that used (1) heating degree days
squared, (2) the number of households in poverty, (3) the number of persons above
age 65 with incomes below 125% of poverty, and (4) the relative cost of fuel in the
region.14 Congress again appropriated $200 million for crisis intervention in both
FY1978 and FY1979.15 In FY1978, funds were available to households with the
need for assistance as the result of an energy-related emergency such as lack of fuel,
a natural disaster, fuel shortages, and widespread unemployment.16 In FY1979, funds
were made available to assist families facing “substantially increased energy costs

10

(...continued)
47096.
11
12

Federal Register, vol. 41, no. 208, October 27, 1976, p. 47096.
See Ibid., pp. 47096-47097.

13

Community Services Administration, “Special Crisis Intervention Program: General
Information, Application Procedures, and Post Grant Requirements,” Federal Register, vol.
42, no. 125, June 29, 1977, p. 33240.
14

The formula was described in the Senate Appropriations Committee report to accompany
H.R. 4877, the FY1977 Supplemental Appropriations Act, 95th Cong., 1st sess., S.Rept. 9564, March 24, 1977. The CSA implemented this formula, which it described in guidance
to the states. See the Federal Register, Ibid.
15

Funds were appropriated through the FY1978 Supplemental Appropriations Act (P.L. 95240) and in FY1979 through a continuing resolution (P.L. 95-482). In FY1978, Congress
called the program Emergency Energy Assistance Program and in FY1979 called it the
Crisis Intervention Program (excluding the word “Special” from the title).
16

Community Services Administration, “Emergency Energy Conservation Program: Funding
Requirements for Emergency Energy Assistance Program,” Federal Register, vol. 43, no.
46, March 8, 1978, p. 9476.

 CRS-5
and/or life- or health-threatening situations caused by winter-related energy
emergencies.”17
In FY1980, Congress appropriated a total of $1.6 billion for energy assistance.
Of this amount, $400 million was appropriated for the Energy Crisis Assistance
Program (ECAP, a CSA program similar to the Special Crisis Intervention Program)
through two separate appropriations.18 The remainder, $1.2 billion, was appropriated
as part of the FY1980 Department of the Interior Appropriations Act (P.L. 96-126)
to the Department of Health, Education, and Welfare (HEW, the predecessor to
HHS) for cash assistance and crisis intervention due to high energy costs. This
appropriation to HEW is sometimes referred to as Low Income Supplemental Energy
Allowances. Of this $1.2 billion, $400 million was to be distributed specifically to
recipients of Supplemental Security Income (SSI). The rest of the funds appropriated
to HEW, approximately $800 million, as well as the ECAP funds, were distributed
to states on the basis of three factors: heating degree days squared, the number of
households below 125% of poverty, and the difference in home heating energy
expenditures between 1978 and 1979. The formula used to distribute the $400
million for SSI recipients used these same factors but also included the number of
SSI recipients in each state relative to the national total.

17

Community Services Administration, “Emergency Energy Conservation Program: Fiscal
Year 1979 Crisis Intervention Program,”Federal Register, vol. 43, no. 250, December 28,
1978, pp. 60466-60467.
18

Congress appropriated $250 million for ECAP as part of an FY1980 Continuing
Resolution (P.L. 96-123, referencing the FY1980 Departments of Labor, Health and Human
Services and Education Appropriations bill, H.R. 4389), and appropriated an additional
$150 million as part of the Department of the Interior Appropriations Act (P.L. 96-126).

 CRS-6

Table 1. Select Energy Assistance Formulas, FY1975-FY1980
Emergency Energy
Conservation Program:a
FY1975
(P.L. 93-644)
(Heating degree
days)2 * number of
homeowners in poverty

Special Crisis
Intervention Program:b
FY1977
(P.L. 95-26)

Low Income Supplemental
Energy Allowances:c
FY1980
(P.L. 96-126)

(Heating degree days)2

½ (Heating degree
days)2 * number of
households below 125% of
poverty

Number of households in
poverty

½ Difference in home heating
expenditures between 1978
and 1979

Number of persons over age
65 with income less than
125% of poverty
Relative cost of fuel
Source: For the formula under P.L. 93-644, see Community Services Administration, “Emergency
Energy Conservation Program: Submission of Funding Plans,” Federal Register, vol. 41, no. 208,
October 27, 1976, p. 47096. For the formula under P.L. 95-26, see Senate Appropriations Committee,
report to accompany H.R. 4877, the FY1977 Supplemental Appropriations Act, 95th Cong., 1st sess.,
S.Rept. 95-64, March 24, 1977. The formula for P.L. 96-126 is contained within the law.
* Multiplied by.
a. Of the funds appropriated for the Emergency Energy Conservation Program, 90% were distributed
via the formula, while the remaining 10% were divided among the 12 coldest states as measured
by heating degree days.
b. The Special Crisis Intervention Program did not specify a weight for each of the four variables used
to determine allocations.
c. Of the $1.6 billion appropriated for energy assistance in FY1980, $400 million was set aside for
SSI recipients. The formula to distribute those funds was a heating degree days2 * number of
households below 125% of poverty, a difference in home heating expenditures between 1978
and 1979, and a SSI recipients in each state relative to the national total.

Low Income Energy Assistance Program (LIEAP)
In April 1980, Congress replaced the patchwork energy assistance programs of
the late 1970s with one program, the Low Income Energy Assistance Program
(LIEAP). LIEAP, the direct predecessor program to LIHEAP, was established as part
of the Crude Oil Windfall Profits Tax Act of 1980 (P.L. 96-223). The program was
introduced in the Senate as the Home Energy Assistance Act (S. 1724) and was
incorporated into H.R. 3919, the bill that would become the Crude Oil Windfall
Profits Tax Act, on the Senate floor. Like the energy assistance programs of the late
1970s such as the Special Crisis Intervention Program and the Low Income
Supplemental Energy Allowances, LIEAP allocated funds to states in order to help
low-income households pay their home energy costs. Also like these predecessor
programs, LIEAP allocated funds to states using a method that put more emphasis
on the heating needs of cold-weather states than it did on cooling needs.
During the 1970s, home energy costs had increased substantially while wages
failed to keep up. According to the report from the Senate Committee on Labor and

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Human Resources that accompanied the Home Energy Assistance Act (S. 1724),
between 1972 and 1979, heating oil prices increased by 293%, natural gas prices by
155%, and electricity prices by 91%, while wages grew by 59% during the same
period.19 During 1978, low-income households spent an estimated 18.4% of their
income, on average, to pay their utilities, with expenditures in New England by lowincome households exceeding 30% of income.20 The Senate Committee on Labor
and Human Resources held numerous hearings about the need for energy assistance
to address the “dramatically rising cost of home heating.”21
The resulting formula in S. 1724 reflected, in part, the committee’s concern that
the problem of rising energy costs were “most critical in areas with high home
heating costs.”22 Although subsequent changes were made to the LIEAP formula in
S. 1724 before it was enacted, the need for heating assistance continued to be
paramount. The formula developed under LIEAP has been used to distribute
LIHEAP funds as recently as FY2007, so the variables used are important in
understanding the current formula and the way in which it is used to distribute funds.
The LIEAP Formula. When the Home Energy Assistance Act (S. 1724) was
introduced, it contained a formula that would have distributed funds to the states on
the basis of half on residential energy expenditures and half on heating degree days
(the heating degree day measure is described in the previous section “Community
Services Administration Energy Assistance Programs”). However, on the Senate
floor, the program formula was amended, resulting in a multi-part formula under
which states would receive funds.
Formula Under P.L. 96-223. Under the final LIEAP formula in P.L. 96-223,
states received funds under one of four alternative formulas used to measure home
energy need, depending on which one benefitted a state the most. Three of the four
formulas contained different combinations of several factors: residential energy
expenditures; heating degree days or heating degree days squared; and the number
of low-income households in the state.
!

Under the first formula alternative, half of the allocation was based
on residential energy expenditures and half on heating degree days
squared multiplied by the number of households at or below the
Bureau of Labor Statistics (BLS) lower living standard.23

19

Senate Committee on Labor and Human Resources, Home Energy Assistance Act, report
to accompany S. 1724, 96th Cong., 1st sess., S.Rept. 96-378, October 25, 1979, p. 2.
20

Ibid., p. 3.

21

Also discussed at the hearings was “the need for some level of assistance to be provided
to certain eligible households, where excessive heat is a factor in threatening life and
health.” Ibid., p. 5. This did not figure prominently into the formula, however.
22
23

Ibid., p. 12.

The BLS determined the lower living standard income level through its annual family
budgets, which it maintained from 1947 to 1981. At the time the LIEAP program was
enacted, the BLS developed annual family budgets assuming three different standards of
(continued...)

 CRS-8
!

Under the second formula alternative, one quarter of the allocation
was based on residential energy expenditures and three quarters
based on heating degree days squared multiplied by the number of
households at or below the BLS lower living standard.

!

Under the third formula alternative, half of the allocation was based
on residential energy expenditures and half based on heating degree
days (not squared) multiplied by the number of households with
incomes at or below the BLS lower living standard.

The fourth option guaranteed states a minimum benefit of $120 for each household
that received Aid to Families with Dependent Children (AFDC) or Food Stamp
benefits. (See Table 2 for a breakdown of these formulas.)
All formulas in P.L. 96-223 effectively gave preference to states with colder
climates due to the variables used. As discussed earlier in this report, the heating
degree day variable is a measure of temperatures below 65° F and therefore favors
cold-weather states. Squaring the heating degree day variable magnifies the
discrepancy between warm- and cold-weather states. In addition, residential energy
expenditures of all households (rather than energy expenditures of low-income
households only) are higher in cold-weather states because, on average, the
proportion of poor families in warm-weather states is higher than that in cold-weather
states. However, the LIEAP law did allow states to provide for cooling when
households could demonstrate medical necessity.24 Congress authorized LIEAP for
one year, FY1981, at $3 billion, but funds were not appropriated as part of P.L. 96223.
Formula Under P.L. 96-369. Before the formula in P.L. 96-223 could be
used to allocate funds, Congress introduced an alternative method for computing the
state distribution rates. It did so when it appropriated $1.85 billion in LIEAP funds
for FY1981 in a continuing resolution (P.L. 96-369), in October of 1980, six months
after enactment of the Crude Oil Windfall Profits Tax Act. The new allocation
method was not described in P.L. 96-369, however. Instead, the continuing
resolution referred to a House Appropriations Committee report (H.Rept. 96-1244)
accompanying another bill — the FY1981 Departments of Labor, Health and Human
Services and Education Appropriations Act. It was in this committee report that the

23

(...continued)
living: lower, intermediate, and higher. The budget was calculated using costs of consumer
goods including food, housing, transportation, clothing, and health care (unlike the federal
poverty guidelines, which are based on the amount of money needed to buy food). The
budget was then adjusted for family size and the prices of goods in various cities throughout
the country. See David S. Johnson, John M. Rogers, and Lucilla Tan, “A Century of Family
Budgets in the United States,” Monthly Labor Review, 124, no. 5 (May 2001): 28-45.
24

According to the law, “The State is authorized to make grants to eligible households to
meet the rising costs of cooling whenever the household establishes that such cooling is the
result of medical need pursuant to standards established by the Secretary.”

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specific formula components for LIEAP were laid out.25 H.Rept. 96-1244 did little
to erode the defacto cold-weather states preference enacted in the original LIEAP
formula.
The first step in the new set of formulas was to determine each state’s share of
funds using two calculations set out in H.Rept. 96-1244 and assign states the greater
of the two amounts.
!

Under the first formula alternative, half of the allocation was based
on the increase in home heating expenditures, and half was based on
the number of heating degree days squared times the population with
income less than or equal to 125% of poverty.

!

Under the second formula alternative, one quarter of the allocation
was based on total residential energy expenditures, and three
quarters was based on heating degree days squared multiplied by the
number of low-income households in the state.

The greater of the two percentages calculated using the formula in H.Rept. 96-1244
was then assigned to each state. After adjusting state allotments proportionately so
that the total allocation reached 100% of funds available, the second step in the
amended formula was to compare these state allotments to 75% of the amount each
state would receive under the formula in P.L. 96-223. States would then receive the
greater of these two amounts.
Although the alternative formulas under H.Rept. 96-1244 used factors similar
to those in P.L. 96-223, the original set of formulas was slightly more favorable to
warm-weather states. For example, the BLS lower living standard was higher than
125% of poverty for most household sizes, which benefitted the South, where the
low-income population was higher.26 The original set of formulas also provided for
a minimum benefit to states on the basis of the number of AFDC and Food Stamp
recipient households, unconditioned on their household heating expenditures. In
addition, the inclusion of the increase in home heating expenditures in H.Rept. 961244 benefitted northeastern states, where heating oil prices had increased
substantially.27

25

House Committee on Appropriations, report to accompany H.R. 7998, the FY1981
Departments of Labor, Health and Human Services, and Education Appropriations Act, 96th
Cong., 2nd sess., H.Rept. 96-1244, August 21, 1980, pp. 75-76.
26

“The Low-Income Home Energy Assistance Program: An Analysis of the 1984
Reauthorization Issues,” Coalition of Northeastern Governors, April 1984, p. 5.
27

H.Rept. 96-1244 did not specify the years between which the increase in home heating
expenditures should be measured. In implementing the formula, HHS measured the increase
between 1978 and 1980.

 CRS-10

Table 2. Distribution of Funds Under LIEAP
P.L. 96-223

P.L. 96-369

Assign each state the option under which they
receive the greatest proportion of funds. If
Options 2 and 3 both result in a greater
proportion than Option 1, assign the state the
lesser of Option 2 or 3.

Each state receives the greater of 75% of the
amount under P.L. 96-223 or Option 1 or
Option 2 under P.L. 96-369.

Option 1:

Option 1:

½ Residential energy
expenditures
½ (Heating degree days)2 *
Households with income #
BLS lower living standard

Option 2:

¼ Residential energy
expenditures
¾ (Heating degree days)2 *
Households with income #
BLS lower living standard

Option 3:

½ Increase in home heating
expenditures from 1978-1980a
½ (Heating degree days)2 *
Population with income #
125% of poverty

Option 2:

¼ Total residential energy
expenditures 1980
¾ (Heating degree days)2 *
Households with income #
BLS lower living standard

½ Residential energy
expenditures
½ Heating degree days *
Households with income #
BLS lower living standard

Option 4:

Funds sufficient for a
minimum benefit of $120 per
AFDC- and/or Food Stamprecipient household

Source: The Crude Oil Windfall Profits Tax Act (P.L. 96-223) and the House Appropriations
Committee Report to Accompany H.R. 7998, the FY1981 Departments of Labor, Health and Human
Services, and Education Appropriations Bill, H.Rept. 96-1244, August 21, 1980.
* Multiplied by.
# Less than or equal to.
a. H.Rept. 96-1244 did not specify which years would be used to determine residential energy
expenditures; 1978 and 1980 were the years used by HHS.

Enactment of LIHEAP
In August 1981, the Omnibus Budget Reconciliation Act, P.L. 97-35, created
LIHEAP, replacing its predecessor, LIEAP. The new program was not substantially
different from the previous program. Some of the changes to the program included
less restrictive federal rules and more state flexibility in determining how to operate
their LIHEAP programs. The program was authorized at $1.85 billion for FY1982FY1984. In FY1982, Congress appropriated $1.875 billion for LIHEAP; in FY1983,
it appropriated $1.975 billion; and in FY1984, $2.075 billion.

 CRS-11

Continued Use of the LIEAP Formula
When the formula for LIEAP was initially created in 1980 under the Crude Oil
Windfall Profits Tax Act (P.L. 96-223), it brought about a good deal of debate on the
floor of the Senate, where the formula provisions were added to the legislation.28
Discussion over the formula also occurred leading up to the enactment of P.L. 96369, the FY1981 continuing resolution that funded LIEAP and amended the
formula.29 Despite these earlier disagreements over formula allocations, the process
to enact LIHEAP in 1981 did not engender the same level of debate or result in a
different formula. Instead, the law creating LIHEAP provided that the allotment
percentages for each state would remain the same as they had been in FY1981 under
the LIEAP formula as amended by P.L. 96-369. From FY1982 through FY1984,
then, states continued to receive the same proportion of funds that they received
under the LIEAP formula.

The 1984 LIHEAP Reauthorization: A New Formula
Formula Discussions. When Congress began to consider reauthorizing
LIHEAP in 1983, two aspects of the formula were debated. First, legislators
recognized that the multi-step LIEAP formula benefitted cold-weather states relative
to warm-weather states.30 This was due to the heating degree day variable and the
fact that residential energy costs of all households (instead of just low-income
households) were used under the various LIEAP formulas. The second debated
aspect of the formula centered on the appropriateness and timeliness of the data used
in formula calculations. In 1983, the energy information used to calculate state
allotments was not the most current data available.31 For example, the most recent
data the formula used were the change in the cost of energy between 1978 and 1980,
or the cost of energy in 1980, depending on the sub-formula one chose to apply. No
aspect of the formula took account of increased costs after 1980.32
Legislative sentiment in favor of changing the formula was evident, when, in
September 1983, the House adopted an amendment to the Emergency Immigration
Education Act (H.R. 3520) that would have adjusted the LIHEAP formula and
resulted in a change in allocations to the states. The amendment’s formula took into
account the energy expenditures of poor families, which, according to the
amendment’s sponsor, Representative Carlos Moorhead (California), would result
28

See, for example, Senate debate, Congressional Record, vol. 125, parts 24-25 (November
13-15, 1979), pp. 32082-32086, 32275-32293, 32558-32565.
29

House debate, Congressional Record, vol. 126, part 18 (August 27, 1980), pp. 2350223515.
30

See, for example, Comments of Rep. Billy Tauzin, Joint Hearing before the
Subcommittees on Energy and Commerce, Education and Labor, and Ways and Means, 98th
Cong., 1st sess., February 24, 1983, pp. 119-120.
31

Report of the Committee on Energy and Commerce to accompany H.R. 2439, the LowIncome Home Energy Assistance Amendments of 1984, 98th Cong., 2nd sess., H.Rept. 98139, Part 2, May 15, 1984, p. 13.
32

Ibid., p. 4.

 CRS-12
in lower percentage allocations for 23 states, mostly in the Northeast and Midwest,
gains for 27, primarily in the South, and the same allocation for one state.33 The
amendment was eventually dropped from H.R. 3520 in conference with the Senate.
Introduction of a Hold-Harmless Level. Efforts to reauthorize LIHEAP
had begun in April 1983 with the introduction of the Low-Income Home Energy
Assistance Amendments of 1984 (H.R. 2439). The bill was referred to two
committees: Education and Labor and Energy and Commerce. Within the Energy
and Commerce committee, two subcommittees held mark-ups: Fossil and Synthetic
Fuels and Energy Conservation and Power.
As introduced, H.R. 2439 did not contain changes to the LIHEAP formula. The
Subcommittees on Fossil and Synthetic Fuels and Energy Conservation and Power
worked together to arrive at a formula change, which had the effect of shifting funds
from states in the Northeast to the South and West. Unlike the previous set of
formulas developed under LIEAP, the new formula directed the Department of
Health and Human Services to determine states’ allotments “using data relating to the
most recent year for which data is available.” Because the cost of heating oil
remained steady between 1981 and 1983, and the price of natural gas rose 33%, this
meant that states in the Northeast — where heating oil was the primary source of
energy — would lose LIHEAP dollars, while states in the South and the Midwest
would gain under this provision.34 In addition, population growth in the South (as
well as its higher poverty rates) meant that southern states would benefit from the use
of more recent population data.
To offset the losses to certain states resulting from the use of current data, H.R.
2439 also included a hold-harmless provision, or hold-harmless level; this provision
ensured that if appropriations were less than or equal to $1.875 billion, states would
receive no less than their allotment would have been under the old formula at this
appropriations level. The bill additionally increased the LIHEAP authorization level
to $2.075 billion for FY1984, $2.26 billion for FY1985, $2.625 billion for FY1987,
and $2.8 billion for FY1988.
Introduction of a Hold-Harmless Rate. After the House Energy and
Commerce Committee reported H.R. 2439 to the House floor — but before the full
House could act on the bill — the Senate passed its version of LIHEAP
reauthorization as part of the Human Services Reauthorization Act (S. 2565) on
October 4, 1984.35 The Senate bill contained language very similar to H.R. 2439, but
made several changes and additions to the formula.

33

Congressional Record, vol. 129, part 17 (September 13, 1983), p. 23877. The greatest
increases in percentage allocations were for Florida at 51%, Texas at 44%, and Alabama at
37%. The states whose percentage allocations decreased the most were Vermont at 32%,
North Dakota at 24%, and New Hampshire at 23%.
34

“The Low-Income Home Energy Assistance Program: An Analysis of the 1984
Reauthorization Issues,” Coalition of Northeastern Governors, April 1984, p. 9.

35

The final version of S. 2565 can be found in the Congressional Record, daily edition, vol.
130 (October 4, 1984), p. S13393.

 CRS-13
!

S. 2565 specified that states’ shares of LIHEAP funds would be
based on the home energy expenditures of low-income households,
not on expenditures of all households.

!

The hold-harmless level was altered. S. 2565 directed that no state
in FY1985 would receive fewer funds than it received in FY1984,
and for FY1986 and thereafter, no state would receive less than the
amount they would have received in FY1984 if the appropriations
level had been $1.975 billion.

!

A second hold-harmless provision, or hold-harmless rate, was
created. The provision maintained the percentage allocated rather
than a total funding level allocated to each affected state.

The hold-harmless rate provision guaranteed that certain states would receive
increased allotments when appropriations reached $2.25 billion. States would qualify
for this increase if their total allotment percentage at an appropriation of $2.25 billion
were less than 1%. These states would instead receive the allotment rate they would
have received at an appropriation of $2.14 billion if that allotment rate were higher
than the rate at $2.25 billion. In its debate about S. 2565, Senators referred to the
hold-harmless rate as the “small States hold harmless,” as the intent was to protect
the small (population) states’ shares of LIHEAP funds.36 Otherwise, these states’
percentage shares of LIHEAP funds might decline, even as total appropriations
increased. No rate protection was guaranteed for more populous states beyond the
aforementioned hold-harmless level.
The Senate bill also included different authorization amounts for LIHEAP,
$2.14 billion for FY1985 and $2.275 billion for FY1986. After S. 2565 passed the
Senate, the House debated and passed the bill on October 9, 1984, retaining all the
provisions included in the Senate version. The bill became P.L. 98-558, the Human
Services Reauthorization Act, on October 30, 1984.
LIHEAP Formula Statutory Language. Unlike the allocation formulas
under LIEAP and the other energy assistance programs that preceded LIHEAP, which
dictated the use of specific variables to determine allotments to the states, the
LIHEAP formula as drafted by Congress gives more general guidance to HHS. The
LIHEAP statute, as enacted in P.L. 98-558 and codified at 42 U.S.C. §8623(a)(2)
provides as follows.
(A) a State’s allotment percentage is the percentage which expenditures for home
energy by low-income households in that State bears to such expenditures in all
States, except that States which thereby receive the greatest proportional increase
in allotments by reason of the application of this paragraph from the amount they
received pursuant to Public Law 98 — 139 [the FY1984 appropriation] shall
have their allotments reduced to the extent necessary to ensure that —
(i) no State for fiscal year 1985 shall receive less than the amount of funds
the State received in fiscal year 1984; and

36

Congressional Record, daily edition, vol. 130 (October 4, 1984), pp. S13415-S13416.

 CRS-14
(ii) no State for fiscal year 1986 and thereafter shall receive less than the
amount of funds the State would have received in fiscal year 1984 if the
appropriations for this subchapter for fiscal year 1984 had been
$1,975,000,000, and
(B) any State whose allotment percentage out of funds available to States from
a total appropriation of $2,250,000,000 would be less than 1 percent, shall not,
in any year when total appropriations equal or exceed $2,250,000,000, have its
allotment percentage reduced from the percentage it would receive from a total
appropriation of $2,140,000,000.

The next section of this report describes how funds are allocated to the states
according to this statutory language.

Determining LIHEAP Regular Fund Allotments
Using the “New” Formula
Current law as enacted in P.L. 98-558, sometimes referred to as the “new”
LIHEAP formula, provides for three different methods to calculate each state’s
allotment of regular LIHEAP funds. The calculation method used to determine state
allotments depends upon the size of the appropriation for that fiscal year. If the
annual appropriation level does not exceed the equivalent of a hypothetical FY1984
appropriation of $1.975 billion, then the allocation rates under the “old” LIHEAP
formula apply. This is sometimes referred to as “Tier I” of the LIHEAP formula. If
appropriations exceed a hypothetical FY1984 appropriation of $1.975 billion, then
new formula rates apply and are used to calculate state allotments. To calculate the
new formula rates, the most recent data available are used to determine the heating
and cooling costs of low-income households. When appropriations exceed the
$1.975 billion level, but are less than $2.25 billion, the new formula rates are used
together with the hold-harmless level. This is sometimes referred to as “Tier II” of
the LIHEAP formula. Finally, if appropriations equal or exceed $2.25 billion, the
new rates apply and both the hold-harmless level together with the hold-harmless rate
are in effect. This is sometimes referred to as “Tier III” of the LIHEAP formula.
This section describes the steps involved in allocating LIHEAP funds to the states
under the three tiers of the formula.

Calculating the New Formula Rates
As mentioned previously, when Congress considered a new formula for
distributing LIHEAP funds in 1983 and 1984, one of its concerns was the
appropriateness and timeliness of the data used in formula calculations. At the time,
the energy information used to calculate state allotments under the LIEAP formula
did not use the most current data available.37 For example, the formula used the
change in cost of energy between 1978 and 1980, but did not take account of

37

Report of the Committee on Energy and Commerce to accompany H.R. 2439, the LowIncome Home Energy Amendments of 1984, 98th Cong., 2nd sess., H.Rept. 98-139, Part 2,
May 15, 1984, p. 13.

 CRS-15
increased costs after 1980. In fact, the formula factors were fixed rates, and the
LIHEAP statute at that time had no provision for allowing newer information to be
incorporated into the determination of state allotments. The LIHEAP formula as
created by P.L. 98-558 requires HHS to use the most recent data available. HHS
updates these data periodically. The most recent data were provided to CRS in
September of 2008.
As directed by the statute as enacted in 1984, the LIHEAP formula uses the
home energy expenditures of low-income households in each state as a first step in
determining the proportion of total regular funds that each state will receive.38
Specifically, this means estimating the amount of money that all low-income
households (as defined by the LIHEAP statute39) in each state spend on heating and
cooling from all energy sources. This method accounts for variations in heating and
cooling needs of the states, the types of energy used, energy prices, and the lowincome population and their heating and cooling methods. The process for capturing
the expenditures of low-income households for the most current year possible
involves the following steps.
!

Total Residential Energy Consumption. The first step in
calculating new formula rates is determining total residential energy
consumption for each heating and cooling source in every state.
Residential energy consumption is usually measured in terms of the
total amount of British Thermal Units (Btus) used in private
households and generally captures energy used for space and water
heating, cooling, lighting, refrigeration, cooking, and the energy
needed to operate appliances. The most recent data used in
calculating LIHEAP formula rates come from the 2004 Energy
Information Administration (EIA) State Energy Data System
consumption estimates.

!

Temperature Variation. The next step in determining the formula
rates involves adjusting the amount of energy consumed for each
fuel source by temperature variation in each state. This is done by
using a ratio consisting of the 30-year average heating and cooling
degree day data to each state’s share of the most recent year’s
average heating and cooling degree days. A heating degree day
measures the extent to which a day’s average temperature falls
below 65°F and a cooling degree day measures the extent to which
a day’s average temperature rises above 65°F.40 For example, a day
with an average temperature of 50°F results in a measure of 15
heating degree days; a day with an average temperature of 80°F

38

“[A] State’s allotment percentage is the percentage which expenditures for home energy
by low-income households in that State bears to such expenditures in all States...” 42 U.S.C.
§8623(a)(2).
39

The LIHEAP statute considers households with income at or below 150% of poverty or
60% of state median income (whichever value is greater) to be low income. 42 U.S.C.
§8624(b)(2)(B).
40

A state’s heating and cooling degree data are weighted by population in the state.

 CRS-16
results in a measure of 15 cooling degree days. The purpose of the
adjustment to fuel consumption is to account for abnormally warm
or cool years, where energy usage might attain extreme values. This
information is collected by the National Oceanic and Atmospheric
Administration. The most recent year’s average heating and cooling
degree day data are from 2006, and the 30-year average was
computed from 1971 to 2000.
!

Heating and Cooling Consumption. As mentioned above, total
residential energy consumption encompasses other uses in addition
to heating and cooling (e.g. operation of appliances). So the next
step in calculating LIHEAP formula rates is to derive the portion of
fuel consumed specifically to heat and cool homes as opposed to
other uses. The EIA, as part of the Residential Energy Consumption
Survey (RECS), uses an “end use estimation methodology” to
estimate the amount of fuel used for heating and cooling (among
other uses). The most recent information on heating and cooling
consumption comes from the 2001 RECS, adjusted for 2003.41

!

Low-Income Household Heating and Cooling Consumption.
After estimating heating and cooling consumption for all
households, the next step is to calculate heating and cooling
consumption in Btus for low-income households. The Bureau of the
Census, Department of Commerce, prepares a special sample for
HHS of the fuel sources used by low-income households. The most
recent information on low-income households and the fuel sources
they use comes from the 2000 Census. In addition, low-income
consumption data are adjusted to account for the fact that lowincome households might use more or less of a fuel source than is
used by households on average. This is done using consumption
data from the 2001 RECS adjusted for 2003.

!

Total Spending on Heating and Cooling. To arrive at the amount
of money that low-income households spend on heating and cooling,
the number of Btus used by low-income households that were
estimated in the previous step are multiplied by the average fuel
price for each fuel source. The total amount spent on heating and
cooling by low-income households for each fuel source is then
added together to arrive at total spending for each state. Regional
energy price variation can be significant, and the formula takes
expected expenditure differences into account. This information is
collected by the EIA and published in the State Energy Data System
Consumption, Price, and Expenditure Estimates.42 The most recent
price data used to calculate formula rates are from 2004.

41

For more information about the RECS, see the EIA website at [http://www.eia.doe.gov/
emeu/recs/].
42

The EIA’s state data tables are available at [http://www.eia.doe.gov/emeu/states/
_seds.html].

 CRS-17
!

New Formula Rate. Finally, these expenditure data are used to
estimate the amount spent by low-income households on heating and
cooling in each state relative to the amount spent by low-income
households on heating and cooling in all states. The calculated
proportion becomes the new formula percentage, or rate, for each
state. See Table 3 at the end of this section for both old and new
LIHEAP formula rates. Column (a) shows the rates under the “old”
formula, while column (b) shows the most recent “new” formula
rates.

These new formula rates are used to allocate LIHEAP funds to the states if the
annual appropriation exceeds the equivalent of a hypothetical FY1984 appropriation
of $1.975 billion. However, these new formula rates do not represent the exact
proportion of funds that states will receive under the new formula. The ultimate
allotments are determined after application of the both the hold-harmless level and
hold-harmless rate, described in the next section. The new rates are the starting point
for determining how funds will be allocated to the states.

Using the New Formula Rates to Allocate Funds to the States
The LIHEAP new formula rates that HHS calculates using the most current data
available do not necessarily represent the proportion of funds that states will receive.
State allotments depend upon the application of the two hold-harmless provisions in
the LIHEAP statute. Some states must have their share of funds ratably reduced in
order to hold harmless those states that would, but for the hold-harmless provisions,
lose funds. Other states see a gain in their share of funds because they benefit from
the hold-harmless provisions. The application of the hold-harmless provisions
depends upon the size of the appropriation for a given fiscal year. These
appropriation level triggers are described below.
Tier I: Below $1.975 Billion. Current law requires that for fiscal years in
which the regular LIHEAP fund appropriation is equivalent to a hypothetical FY1984
appropriation of $1.975 billion or less, states receive the same percentage of funds
that they would have received at that appropriation level under the “old” LIHEAP
formula.43 This FY1984 appropriation of $1.975 billion referred to in the LIHEAP
statute is hypothetical because this was not the amount actually appropriated in
FY1984. The actual FY1984 appropriation was $2.075 billion. In addition, the
current year appropriation that is “equivalent to” a hypothetical FY1984
appropriation of $1.975 billion is not exactly $1.975 billion. In FY1984, with the
exception of funds provided to the territories, all LIHEAP regular funds were
distributed to the states. Since then, two other funds have become part of the regular
fund distribution. These are funds for training and technical assistance and for the

43

It is important to understand, however, that although the new formula rates are always
applied to all appropriations, when appropriations are below a hypothetical FY1984
appropriation of $1.975 billion, the result of the current law’s hold-harmless provisions is
that states receive the same allotment percentages that they did under the old formula. See
U.S. Department of Health and Human Services, Low Income Home Energy Assistance
Program: Report to Congress for FY1987, p. 133.

 CRS-18
leveraging incentive grants (which includes REACH grants) to the states. This
means that an appropriation that is equivalent to a hypothetical FY1984 appropriation
of $1.975 billion must account for these new funds. Assuming that funds for
leveraging incentive/REACH grants is $27 million and training and technical
assistance is $300,000 (the amounts allocated to these funds in FY2009), then the
equivalent of an FY1984 appropriation of $1.975 billion is approximately $2.0023
billion.44
The LIHEAP formula in FY1984 distributed funds by giving states the same
share of funds that they received in FY1981 under the predecessor program, the Low
Income Energy Assistance Program (LIEAP). Table 3, at the end of this section of
the report, shows rates under the old formula in column (a). For example, at an
appropriation at or below the equivalent of a hypothetical FY1984 appropriation of
$1.975 billion, Alabama would receive 0.86% of total funds, Alaska would receive
0.55% of total funds, and so on. Appendix A, Table A-1, column (a) reports the
dollar amount of funds that each state would have received in FY1984 had the
regular fund appropriation been $1.975 billion.
Tier II: From $1.975 Billion up to $2.25 Billion. If the regular LIHEAP
appropriation exceeds a hypothetical FY1984 appropriation of $1.975 billion for the
fiscal year, all funds are to be distributed under a different methodology, using the
new set of rates described earlier. In addition, a hold-harmless level applies to ensure
that certain states do not fall below the amount of funds they would have received at
the equivalent of a hypothetical FY1984 appropriation of $1.975 billion. Table 3,
at the end of this section, shows whether a state benefits from the hold-harmless
level. This is indicated by a “Y” in column (c), while the dollar amount of funds
those states receive by being held harmless appears in column (d). For example,
Alabama is not held harmless, while Alaska is held harmless. The dollar amount of
funds that Alaska receives pursuant to the hold-harmless level is $10.828 million.
But for the hold-harmless level, Alaska would receive less than this dollar amount
at its new formula rate at certain appropriation levels. Eventually, when
appropriations increase sufficiently, the allotments for states that are held harmless
with exceed their hold harmless amounts. This appropriation level varies for each
state.
The hold-harmless level is achieved by reducing the allocation of funds to those
states with the greatest proportional gains under the new formula rates.45 For
example, under the most recent LIHEAP formula rates, states with the greatest
proportional gains were Nevada, Texas, and Florida. Depending on the appropriation
level, these states (and others with the greatest gains) may then have their allotments
reduced to hold harmless those states that would otherwise see reduced benefits. So
although these states with the greatest proportional gains will see their LIHEAP

44
45

This amount is arrived at by adding $27 million and $300,000 to $1.975 billion.

“States which thereby receive the greatest proportional increase in allotments ... shall have
their allotments reduced to the extent necessary to ensure that ... no State for fiscal year
1986 and thereafter shall receive less than the amount of funds the State would have
received in fiscal year 1984 ...” 42 U.S.C. §8623(a)(2)(A)(ii).

 CRS-19
allotments increase under the new formula, their allotments may not increase to reach
their new formula rates (column (b) of Table 3).
Columns (b) and (c) of Table A-1 in Appendix A show estimated allotments
to the states at hypothetical appropriations levels under Tier II of the LIHEAP
formula. Column (b) shows the estimated allotment of funds that each state would
receive when the regular fund appropriation is at $2.14 billion and column (c) shows
the estimated allotment of funds when the regular fund appropriation is just under
$2.25 billion ($2,249,999,999).
Tier III: At or Above $2.25 Billion. The LIHEAP statute stipulates
additional requirements in the method for distributing funds when the appropriation
is at or above $2.25 billion. At this level, all of the provisions specified in the Tier
II allocation methodology are in place, including the change in the formula factors
and the hold-harmless level. In addition, a new hold-harmless rate is applied. That
is, for all appropriation levels at or above $2.25 billion, states that would have
received less than 1% of a total $2.25 billion appropriation must be allocated the
percentage they would have received at a $2.14 billion appropriation level.46 (This
assumes the percentage at $2.14 billion is greater than the percentage originally
calculated at the hypothetical $2.25 billion appropriation; this is not true for all states
that receive less than 1% of the $2.25 billion appropriation.) Then that state will
receive the $2.14 billion allotment proportion for all appropriation levels at or above
$2.25 billion. This hold-harmless rate ensures a state specific share of the total
available funds.
As with the Tier II funding level, the allocations to the states with the greatest
proportional gains are then ratably reduced again, using the methodology described
in the Tier II discussion, until there is no funding shortfall. Column (e) of Table 3
shows which states benefit from the hold-harmless rate, indicated by a “Y,” while
column (f) shows the proportion of funds that those states receive. For example,
Alaska benefits from the hold-harmless rate and receives 0.513% of the total
appropriation when appropriations are at or above $2.25 billion.
The application of the hold-harmless rate creates another layer of discontinuity
in the allocation rates. Columns (d) through (h) of Table A-1 in Appendix A show
estimated allotments to states at various hypothetical appropriations levels above at
or above $2.25 billion. Column (d) shows the estimated allotment of funds that each
state receives when the regular appropriation is at $2.25 billion after the holdharmless rate is applied. Columns (e) through (h) show the estimated allotment each
state would receive at $2.5 billion, $3.0 billion, $4.0 billion, and $5.1 billion.

46

“[A]ny State whose allotment percentage out of funds available to States from a total
appropriation of $2,250,000,000 would be less than 1 percent, shall not, in any year when
total appropriations equal or exceed $2,250,000,000, have its allotment percentage reduced
from the percentage it would receive from a total appropriation of $2,140,000,000.” 42
U.S.C. §8623(a)(2)(B).

 CRS-20

Implementation of the “New” LIHEAP Formula
Until FY2006, appropriations for regular LIHEAP funds had only exceeded the
equivalent of a hypothetical FY1984 appropriation of $1.975 billion in 1985 and
1986; therefore, from FY1987 through FY2005, and again in FY2007, states
continued to receive the same percentage of LIHEAP funds that they received under
the program’s predecessor, LIEAP (see column (a) of Table 3 for these proportions).
In FY2006, funds were distributed under the “new” LIHEAP formula when Congress
appropriated $2.48 billion in regular funds for the program. In FY2008, perhaps due
to an oversight, the new formula was again used to distribute funds. The FY2008
Consolidated Appropriations Act (P.L. 110-161) failed to authorize a set-aside called
leveraging incentive grants. As a result, the funds for those grants were added to the
LIHEAP regular funds, triggering the new formula.47 In FY2009, the Consolidated
Security, Disaster Assistance, and Continuing Appropriations Act (P.L. 110-329)
appropriated $4.51 billion in regular funds. However, the law further specified that
$840 million be distributed according to the “new” LIHEAP formula, with the
remaining $3.67 billion distributed according to the proportions of the “old” formula
established by LIEAP. See Table C-1 in Appendix C of this report for the
distribution of funds to the states in FY2006 through FY2009.

47

For more information about this issue, see Appendix C of this report.

 CRS-21

Table 3. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, 2008
Hold-Harmless Level
“Old”
Allotment
Rate (%)
State
(a)
Alabama
0.860
Alaska
0.549
Arizona
0.416
Arkansas
0.656
California
4.614
Colorado
1.609
Connecticut
2.099
Delaware
0.279
District of Columbia
0.326
Florida
1.361
Georgia
1.076
Hawaii
0.108
Idaho
0.628
Illinois
5.809
Indiana
2.630
Iowa
1.864
Kansas
0.856
Kentucky
1.369
Louisiana
0.879
Maine
1.360
Maryland
1.607
Massachusetts
4.198
Michigan
5.515
Minnesota
3.973
Mississippi
0.737
Missouri
2.320
Montana
0.736
Nebraska
0.922
Nevada
0.195
New Hampshire
0.795
New Jersey
3.897
New Mexico
0.521
New York
12.725
North Carolina
1.896
North Dakota
0.800
Ohio
5.139
Oklahoma
0.791
Oregon
1.247
Pennsylvania
6.835
Rhode Island
0.691
South Carolina
0.683
South Dakota
0.649

Hold-Harmless Rate

Subject to
Hold- Subject to
“New” HoldHarmless
HoldAllotment Harmless
Level Harmless
Rate (%) Level?
($Millions) Rate?
(b)
(c)
(d)
(e)
1.650
N
—
N
0.317
Y
10.828
Y
0.813
N
—
N
0.910
N
—
N
5.303
N
—
N
1.305
Y
31.729
N
2.164
N
—
N
0.453
N
—
N
0.328
N
—
N
3.781
N
—
N
2.734
N
—
N
0.099
Y
2.137
Y
0.331
Y
12.376
Y
4.998
Y
114.565
N
2.128
Y
51.872
N
1.064
Y
36.762
N
1.106
N
—
N
1.621
N
—
N
1.514
N
—
N
0.908
Y
26.815
N
2.652
N
—
N
3.311
Y
82.797
N
4.645
Y
108.770
N
1.917
Y
78.363
N
0.951
N
—
N
2.309
Y
45.762
N
0.441
Y
14.517
Y
0.558
Y
18.180
Y
0.576
N
—
N
0.503
Y
15.672
Y
3.621
Y
76.865
N
0.577
N
—
N
9.393
Y
250.974
N
3.261
N
—
N
0.273
Y
15.770
Y
4.803
Y
101.350
N
1.275
N
—
N
0.750
Y
24.591
N
5.731
Y
134.810
N
0.665
Y
13.629
N
1.349
N
—
N
0.235
Y
12.808
Y

HoldHarmless
Rate (%)
(f)
—
0.513
—
—
—
—
—
—
—
—
—
0.101
0.587
—
—
—
—
—
—
—
—
—
—
—
—
—
0.688
0.862
—
0.743
—
—
—
—
0.748
—
—
—
—
—
—
0.607

 CRS-22
Hold-Harmless Level

State
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

“Old”
Allotment
Rate (%)
(a)
1.386
2.264
0.748
0.596
1.957
2.051
0.906
3.576
0.299

Hold-Harmless Rate

Hold- Subject to
Subject to
“New” HoldHarmless
HoldAllotment Harmless
Level Harmless
($Millions) Rate?
Rate (%) Level?
(b)
(c)
(d)
(e)
1.801
N
—
N
6.524
N
—
N
0.599
Y
14.745
Y
0.319
Y
11.747
Y
3.041
N
—
N
1.204
Y
40.450
N
0.907
N
—
N
2.080
Y
70.538
N
0.202
5.903
Y
Y

HoldHarmless
Rate (%)
(f)
—
—
0.699
0.557
—
—
—
—
0.280

Source: Congressional Research Service (CRS) calculations based on factors provided by the
Department of Health and Human Services (HHS) in September 2008.
Note: The actual proportion of total regular funds each state receives at funding levels above $1.975
billion may differ substantially from the calculated new formula rate due to the hold-harmless
provisions and the ratable reductions to cover shortfall from these hold-harmless provisions.

 CRS-23

Appendix A: Estimated Appropriations to the States
Under Various Hypothetical Appropriation Levels
Table A-1, below, shows estimated allocations to the states at various
hypothetical appropriations levels. In column (a) are allotments at the equivalent of
a hypothetical FY1984 appropriation of $1.975 billion — under current LIHEAP
practice where funds are set aside for leveraging incentive grants and training and
technical assistance, the equivalent appropriation level is approximately $2.0023
billion. The remaining columns show estimated allotments at appropriations of $2.14
billion, just under $2.25 billion, $2.25 billion, $3.0 billion, $4.0 billion, and $5.1
billion, the amount at which the LIHEAP program was last authorized in P.L. 109-58.

 CRS-24

Table A-1. LIHEAP Estimated State Allotments for Regular Funds
at Various Hypothetical Appropriation Levels
($ in millions)
Tier I

State
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

Hypothetical
$1.975 Billion
in FY1984
(a)
16.963
10.828
8.203
12.943
91.001
31.729
41.392
5.494
6.428
26.840
21.221
2.137
12.376
114.565
51.872
36.762
16.883
26.994
17.342
26.815
31.693
82.797
108.770
78.363
14.543
45.762
14.517

Tier II

Tier III

$2.14 Billion
(b)
21.677
10.828

Just under
$2.25 Billion
(c)
26.014
10.828

$2.25 Billion
(d)
25.613
11.392

$2.5 Billion
(e)
34.432
12.673

$3.0 Billion
(f)
48.984
15.235

$4.0 Billion
(g)
65.463
20.360

$5.1 Billion
(h)
83.588
25.998

10.483
16.541
111.879
31.729
45.660
7.021
6.924
34.300
27.119
2.137
12.376
114.565
51.872
36.762
21.575
34.197
22.162
26.815
40.502
82.797
108.770
78.363
18.585
48.714
14.517

12.580
19.850
117.704
31.729
48.037
8.425
7.285
41.161
32.544
2.201
12.376
114.565
51.872
36.762
24.554
35.977
26.595
26.815
48.603
82.797
108.770
78.363
21.109
51.250
14.517

12.387
19.544
117.704
31.729
48.037
8.296
7.285
40.527
32.043
2.248
13.021
114.565
51.872
36.762
24.554
35.977
26.185
26.815
47.855
82.797
108.770
78.363
21.109
51.250
15.273

16.652
22.461
130.942
32.226
53.440
11.152
8.104
54.481
43.076
2.501
14.485
123.428
52.542
36.762
27.315
40.024
35.201
26.815
64.331
82.797
114.704
78.363
23.483
57.014
16.990

24.142
27.003
157.420
38.742
64.246
13.461
9.743
79.847
63.131
3.007
17.415
148.386
63.166
36.762
32.839
48.117
44.941
26.965
78.717
98.293
137.898
78.363
28.231
68.543
20.426

32.264
36.087
210.375
51.774
85.859
17.989
13.020
121.835
96.330
4.019
23.273
198.302
84.415
42.208
43.885
64.303
60.059
36.036
105.198
131.358
184.287
78.363
37.728
91.601
27.297

41.197
46.079
268.626
66.110
109.632
22.969
16.625
156.397
123.655
5.131
29.717
253.210
107.788
53.895
56.037
82.108
76.689
46.015
134.326
167.729
235.314
97.088
48.175
116.964
34.856

 CRS-25
Tier I

State
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
Total

Hypothetical
$1.975 Billion
in FY1984
(a)
18.180
3.853
15.672
76.865
10.270
250.974
37.403
15.770
101.350
15.592
24.591
134.810
13.629
13.472
12.808
27.344
44.653
14.745
11.747
38.606
40.450
17.864
70.538
5.903
1,972.33

Tier II

$2.14 Billion
(b)
18.180
4.924
15.672
76.865
12.182
250.974
47.798
15.770
101.350
19.926
24.591
134.810
14.037
17.216
12.808
34.944
57.064
14.745
11.747
49.336
40.450
19.140
70.538
5.903
2,109.839

Just under
$2.25 Billion
(c)
18.180
5.909
15.672
80.379
12.816
250.974
57.359
15.770
106.614
23.912
24.591
134.810
14.767
20.660
12.808
39.984
68.479
14.745
11.747
59.204
40.450
20.136
70.538
5.903
2,219.690

Tier III

$2.25 Billion
(d)
19.127
5.818
16.488
80.379
12.816
250.974
56.476
16.591
106.614
23.544
24.591
134.810
14.767
20.342
13.475
39.984
67.424
15.512
12.358
58.293
40.450
20.136
70.538
6.211
2,219.690

$2.5 Billion
(e)
21.278
7.821
18.342
89.419
14.257
250.974
75.921
18.457
118.605
31.486
24.591
141.520
16.428
27.346
14.990
44.481
90.638
17.257
13.748
75.098
40.450
22.401
70.538
6.909
2,469.351

$3.0 Billion
(f)
25.581
11.462
22.051
107.501
17.140
278.838
96.804
22.189
142.588
37.853
24.591
170.137
19.750
40.049
18.021
53.475
132.838
20.747
16.528
90.283
40.450
26.931
70.538
8.306
2,968.674

$4.0 Billion
(g)
34.186
17.489
29.469
143.663
22.906
372.637
129.368
29.653
190.554
50.586
29.762
227.370
26.394
53.522
24.084
71.464
202.694
27.726
22.088
120.654
47.756
35.990
82.519
11.101
3,967.320

$5.1 Billion
(h)
43.652
22.451
37.629
183.442
29.249
475.817
165.189
37.864
243.316
64.593
38.002
290.326
33.702
68.341
30.752
91.252
260.192
35.403
28.204
154.061
60.979
45.956
105.367
14.174
5,065.830

Source: Congressional Research Service (CRS) calculations based on factors provided by the Department of Health and Human Services (HHS) in September 2008.
Notes: These estimates take into account current law, which allows HHS to set aside funds out of regular LIHEAP funds for territories, leverage incentive grants and
Residential Energy Assistance Challenge (REACH) grants and training and technical assistance. For each estimate, approximately 0.14% is allocated to the territories,
$27 million to leveraging incentive and REACH grants, and $300,000 to training and technical assistance. Differing allocations to leveraging incentive and REACH
grants could change state allotments.

 CRS-26

Appendix B: Further Depiction of How State
Allotments Depend Upon Appropriation Levels
Figure 1 graphically illustrates state allotments for three “typical” types of states
over a range of appropriations from $0 to $5.1 billion. Represented are (1) a holdharmless level state, (2) a hold-harmless level and rate state, and (3) a state whose
increased allocations are ratably reduced in order to maintain allocations for the holdharmless level and rate states.
In the figure, there are three vertical areas. These areas separate the three levels
of appropriations (Tiers I-III) that are triggers under current law and were explained
previously in this report. The figure also graphs the three basic types of states.
Reading from top to bottom of Figure 1, these three types of states are as follows.
!

Hold-Harmless Level Only States. These states are subject to only
the hold-harmless level provision. They do not qualify for the holdharmless rate because each state’s share of the regular funds at $2.25
billion is greater than 1%. An example of a hold-harmless level only
state is represented by the line that runs from $0 to point G. The
hold-harmless level is evident from point A to point F. Here, despite
increases in the appropriations level, the state allotment remains
fixed. In Table 3, these are the states that have a “Y” in the
“Subject to hold-harmless level?” column and a “N” in the
“Subject to hold-harmless rate?” column.

!

Ratable Reduction States. These states are subject to a ratable
reduction. Their new formula rate is greater than their old, FY1984,
rate. An example of these states is depicted by the line that runs
from $0 to point H. There is a small decrease in state allotments at
point D that is attributable to the increased shortfall on the
distribution of funds that the hold-harmless rate imposes. In Table
3, these are the states that have a “N” in the “Subject to
hold-harmless level?” column and a “N” in the “Subject to
hold-harmless rate?” column.

!

Hold-Harmless Level and Rate States. These states are subject to
both the hold-harmless level and the hold harmless rate provisions.
An example of a typical level and rate state is shown by the line that
runs from $0 to point I. The hold-harmless level is evident by the
fixed state allotment from point C to point E. However, the (subtle)
jump at exactly $2.25 billion signals that this state is subject to the
hold-harmless rate provision. After the allotment jump at $2.25
billion, the state’s allotment continues to increase (at a rate lower
than the old rate, but higher than the new rate). In Table 3, these are
the states that have a “Y” in the “Subject to hold-harmless level?”
column and a “Y” in the “Subject to hold-harmless rate?” column.

 CRS-27
Figure 1. Estimated Low Income Home Energy Assistance (LIHEAP) Allocations at Various Hypothetical Appropriations Level
for Three Types of States
$120
T ie r II h o ld - h a r m le s s
le v e l

T ie r I

G

T ie r III h o ld - h a rm le s s r a te
$100
Ho ld - h a r m le s s le v e l
o n ly s ta te

($ in millions)

State Allotment

$80

H
F

A
R a ta b ly r e d u c e d
s ta te

$60

Ho ld - h a r m le s s le v e l
a n d r a te s ta te
$40
D

$20

I

B

C

E

$0
$0

$ 1 ,0 0 0

$ 2 ,0 0 0

$ 3 ,0 0 0

$ 4 ,0 0 0

$ 5 ,0 0 0

Ap p r o p r ia t io n
( $ in m illio n s )

Source: Figure created by Congressional Research Service (CRS) calculations using allotment rates provided by the Department of Health and Human Services in September 2008.

 CRS-28

Appendix C: Actual LIHEAP Allocations
to the States, FY2006-FY2009
In the most recent regular fund appropriation for LIHEAP, the FY2009
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act (P.L.
110-329), Congress appropriated $4.51 billion. However, of that amount, $840
million was to be distributed according to the “new” formula and the remainder
under the “old” formula proportions. Column (e) of Table C-1 shows the amount
of regular funds that each state received under P.L. 110-329.
In the FY2008 Consolidated Appropriations Act (P.L. 110-161), Congress
appropriated $1.98 billion in LIHEAP regular funds.48 The first distribution to the
states of the regular funds appropriated in P.L. 110-161 occurred in December 2007;
allocations were made on the basis of the proportions of the “old” LIHEAP formula.
The amount of funds that each state received under this allotment is in column (c) of
Table C-1. Then, on June 26, 2008, HHS announced that it would distribute funds
that were thought to have been allocated to leveraging incentive and REACH grants
in the FY2008 Appropriations Act as part of the regular fund formula grants. Since
the early 1990s, leveraging incentive and REACH grants have been made to states
and tribes on the basis of their ability to obtain non-LIHEAP resources for energy
assistance (leveraging incentive grants) and for increasing energy efficiency of lowincome households (REACH grants). In recent years, Congress has allocated about
$27 million for these two funds. However, in FY2008, P.L. 110-161 did not
appropriate funds for leveraging incentive and REACH grants. When HHS
discovered that language to appropriate the funds was missing from the law, it
released the $26.7 million that would otherwise have been distributed as leveraging
incentive and REACH grants as part of the LIHEAP formula distribution. The
addition of nearly $27 million to the formula grants caused the funds to be released
under the “new” LIHEAP formula. Column (d) of Table C-1 shows the total amount
of funds that each state received after $26.7 million was added and funds were
distributed under the new formula.
Column (b) of Table C-1 shows the amounts allocated to the states in FY2007
when Congress appropriated $1.98 billion in regular LIHEAP funds as part of a
year-long continuing resolution (P.L. 110-5). Funds were distributed according to
the proportions of the old formula. Column (a) shows the amount allotted to each
state in FY2006, when $2.48 billion was appropriated for LIHEAP regular funds
through two different laws. The FY2006 Departments of Labor, Health and Human
Services, and Education Appropriations Act (P.L. 109-149) appropriated $1.98
billion for LIHEAP and a bill to make available funds in the Deficit Reduction Act
of 2005 for LIHEAP (P.L. 109-204) appropriated $500 million.

48

P.L. 110-161 contained an across-the-board rescission of 1.747% that reduced the stated
amounts appropriated for most Departments of Labor, Health and Human Services, and
Education programs. See Division G, Section 528 of P.L. 110-161. The $1.98 billion
appropriation for regular funds was the amount available after this rescission.

 CRS-29

Table C-1. LIHEAP Actual State Regular Fund Allotments for
FY2006 through FY2009
($ in millions)

State
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
Rhode Island
South Carolina

FY2007
FY2006
Allotments: Allotments:
$1.98
$2.48
billionb
billiona
(a)
(b)
31.310
16.769
12.572
10.704
15.142
8.110
22.765
12.796
153.184
89.963
31.729
31.367
47.809
40.920
10.141
5.431
7.852
6.355
49.542
26.534
39.170
20.979
2.555
2.113
14.370
12.235
145.959
113.259
53.986
51.280
36.762
36.343
26.798
16.690
44.347
26.686
32.010
17.144
26.815
26.509
58.499
31.332
82.797
81.853
108.770
107.529
78.363
77.469
26.843
14.377
59.541
45.240
16.856
14.351
21.109
17.973
7.112
3.809
18.197
15.493
77.540
75.988
11.925
10.153
250.974
248.112
69.038
36.976
18.310
15.590
122.259
100.194
28.780
15.415
24.591
24.311
134.810
133.273
15.825
13.473
24.867
13.318

FY2008
Allotments
Prior to
6-26-08:
$1.98
billionc
(c)
16.774
10.707
8.112
12.799
89.985
31.375
40.930
5.433
6.356
26.541
20.985
2.113
12.238
113.287
51.293
36.352
16.695
26.693
17.148
26.516
31.340
81.873
107.556
77.488
14.381
45.251
14.355
17.978
3.810
15.497
76.007
10.156
248.173
36.985
15.594
100.219
15.418
24.317
133.306
13.477
13.322

FY2008
Allotments
After
6-26-08:
FY2009
$1.98 Allotments:
billiond $4.5 billione
(d)
(e)
17.111
60.063
10.828
23.568
8.275
29.047
13.057
36.497
91.797
225.894
31.729
63.474
41.754
95.783
5.542
17.384
6.484
14.653
27.075
95.037
21.407
75.141
2.137
4.652
12.376
26.939
114.565
237.236
51.872
103.609
36.762
67.803
17.031
45.349
27.230
68.353
17.494
57.196
26.815
49.457
31.971
101.296
82.797
162.981
108.770
222.412
78.363
144.528
14.670
39.011
45.762
103.541
14.517
31.598
18.180
39.573
3.887
13.643
15.672
34.112
76.865
166.690
10.360
24.901
250.974
475.935
37.730
123.243
15.770
34.325
101.350
220.588
15.729
49.007
24.591
45.355
134.810
274.925
13.629
30.209
13.590
47.702

 CRS-30

State
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total

FY2006
FY2007
Allotments: Allotments:
$2.48
$1.98
billiona
billionb
(a)
(b)
14.871
12.662
46.363
27.033
82.421
44.144
17.120
14.576
13.639
11.613
71.259
38.166
40.450
39.988
23.818
17.660
70.538
69.733
6.854
5.836
2,449.16
1,949.83

FY2008
Allotments
Prior to
6-26-08:
$1.98
billionc
(c)
12.665
27.039
44.155
14.580
11.616
38.175
39.998
17.665
69.750
5.838
1,950.314

FY2008
Allotments
After
6-26-08:
FY2009
$1.98 Allotments:
billiond $4.5 billione
(d)
(e)
12.808
27.878
27.584
73.723
45.044
158.110
14.745
32.094
11.747
25.568
38.944
118.084
40.450
74.603
17.935
40.584
70.538
130.096
5.903
12.850
1,977.027 4,476.302

Source: Department of Health and Human Services (HHS) final regular fund allocations for FY2006
through FY2009. These include tribal allotments.
a. The total regular fund appropriation for FY2006 was $2.48 billion, $1.98 billion of which was
appropriated in P.L. 109-149, and $500 million in P.L. 109-204. Initially, P.L. 109-149
appropriated $2.0 billion for regular funds, but the amount was subject to a 1% across-theboard rescission, resulting in a $1.98 billion appropriation (P.L. 109-148). In addition, both
training and technical assistance and the leveraging incentive and REACH funds were
reduced by 1% in column (a).
b. Congress approved a year-long continuing resolution for FY2007 (P.L. 110-5), which was enacted
on February 15, 2007. The law provided that LIHEAP receive the same amount of funds for
FY2007 that was appropriated for FY2006 in P.L. 109-149, as reduced by a 1% rescission
(P.L. 109-148).
c. The initial allotments for FY2008 were slightly greater than for FY2007, despite the similar
appropriations levels, due to a 1.747% across-the-board rescission for most Departments of
Labor, Health and Human Services, and Education programs. See P.L. 110-161, Division
G, Section 528. This meant that set asides for leveraging incentive and REACH grants, and
for training and technical assistance, were slightly reduced from FY2007 levels.
d. On June 26, 2008, HHS released an additional $26.7 million in formula grants to the states. These
funds had been set aside for leveraging incentive and REACH grants until HHS realized that
Congress had not appropriated these funds in P.L. 110-161. As a result, distributions were
re-calculated under the “new” LIHEAP formula, and additional funds were provided to the
states.
e. Congress appropriated approximately $4.5 billion for LIHEAP as part of a continuing resolution
(P.L. 110-329). Of this amount, $840 million was allocated under the “new” LIHEAP
formula, with the remainder allocated according to the proportions of the “old” LIHEAP
formula.
“new” LIHEAP formula.
This report will be updated when new formula data are released and when proposed funding
levels change (see Appendix C).

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Contents
Introduction ................................................................................................................................1
Predecessor Programs to LIHEAP...............................................................................................2
Community Services Administration Energy Assistance Programs.........................................2
Low Income Energy Assistance Program (LIEAP) ................................................................5
The LIEAP Formula........................................................................................................6
Enactment of LIHEAP ................................................................................................................8
Continued Use of the LIEAP Formula ...................................................................................9
The 1984 LIHEAP Reauthorization: A New Formula ............................................................9
Formula Discussions .......................................................................................................9
Introduction of a Hold-Harmless Level.......................................................................... 10
Introduction of a Hold-Harmless Rate ........................................................................... 10
LIHEAP Formula Statutory Language........................................................................... 11
Determining LIHEAP Regular Fund Allotments Using the “New” Formula............................... 12
Calculating the New Formula Rates .................................................................................... 12
Using the New Formula Rates to Allocate Funds to the States ............................................. 14
Tier I: Below $1.975 Billion.......................................................................................... 15
Tier II: From $1.975 Billion up to $2.25 Billion ............................................................ 15
Tier III: At or Above $2.25 Billion ................................................................................ 16
Implementation of the “New” LIHEAP Formula ................................................................. 17

Figures
Figure B-1. Estimated Low Income Home Energy Assistance (LIHEAP) Allocations at
Various Hypothetical Appropriations Level for Three Types of States ..................................... 27

Tables
Table 1. Select Energy Assistance Formulas, FY1975-FY1980 ....................................................4
Table 2. Distribution of Funds Under LIEAP...............................................................................8
Table 3. Low-Income Home Energy Program (LIHEAP): “Old” and “New” Allotment
Rates by State, 2009............................................................................................................... 17
Table 4. Recent State Allotment Rates Under the “New” LIHEAP Formula ............................... 20
Table A-1. LIHEAP Estimated State Allotments for Regular Funds at Various
Hypothetical Appropriation Levels ......................................................................................... 23
Table C-1. LIHEAP Actual State Regular Fund Allotments for FY2006 through FY2009
and Estimated FY2010 Allotments ......................................................................................... 29

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Appendixes
Appendix A. Estimated Allotments to the States Under Various Hypothetical
Appropriation Levels ............................................................................................................. 22
Appendix B. Further Depiction of How State Allotments Depend Upon Appropriation
Levels .................................................................................................................................... 26
Appendix C. Actual LIHEAP Regular Fund Allotments to the States, FY2006-FY2009,
and Estimated FY2010 Allotments ......................................................................................... 28

Contacts
Author Contact Information ...................................................................................................... 31

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Introduction
The Low Income Home Energy Assistance Program (LIHEAP) is a block grant program
administered by the Department of Health and Human Services (HHS) under which the federal
government gives annual grants to states, the District of Columbia, U.S. territories and
commonwealths, and Indian tribal organizations to operate multi-component home energy
assistance programs for needy households. 1 Established in 1981 by Title XXVI of P.L. 97-35, the
Omnibus Budget Reconciliation Act, LIHEAP has been reauthorized and amended a number of
times, most recently in 2005, when P.L. 109-58, the Energy Policy Act, authorized annual regular
LIHEAP funds at $5.1 billion per year from FY2005 through FY2007.2
The federal LIHEAP statute has very broad guidelines, with almost all decisions regarding the
program’s operation made by the states. Recipients may be helped with their heating and cooling
costs, receive crisis assistance, have weatherizing expenses paid, or receive other aid designed to
reduce their home energy needs. Households with incomes up to 150% of the federal poverty
income guidelines or, if greater, 60% of the state median income, are federally eligible for
LIHEAP benefits. States may adopt lower income limits, but no household with income below
110% of the poverty guidelines may be considered ineligible. The most current HHS data show
that an estimated 5.5 million households received winter heating or winter crisis assistance in
FY2006 (the largest share of LIHEAP funds pay for heating assistance).3
The LIHEAP statute provides for two types of program funding: regular funds—sometimes
referred to as block grant funds—and emergency contingency funds. Regular funds are allotted to
states on the basis of the LIHEAP statutory formula, which was enacted as part of the Human
Services Reauthorization Act of 1984 (P.L. 98-558).4 The way in which regular funds are
allocated to states depends on the amount of funds appropriated by Congress. The second type of
LIHEAP funds, emergency contingency funds, may be released and allotted to one or more states
at the discretion of the President and the Secretary of HHS.5 The funds may be released at any
point in the fiscal year to meet additional home energy assistance needs created by a natural
disaster or other emergency.6
The remainder of this report discusses only the history and methods of distributing regular
LIHEAP funds.

1
For additional information on LIHEAP, see CRS Report RL31865, The Low-Income Home Energy Assistance
Program (LIHEAP): Program and Funding, by Libby Perl.
2
LIHEAP is codified at 42 U.S.C. §§8621-8630.
3
U.S. Department of Health and Human Services, Administration for Children and Families, FY2006 LIHEAP Report
to Congress, April 22, 2009, p. 21.
4
The formula section is codified at 42 U.S.C. §8623.
5

Depending on how Congress appropriates them, contingency funds may remain available for distribution in more than
one fiscal year or they may expire with the fiscal year for which they were appropriated.
6
The statutory definition of emergency includes a significant home energy supply shortage or disruption, a significant
increase in the cost of home energy, a significant increase in home energy disconnections, a significant increase in
participation in a public benefit program, a significant increase in unemployment, or an event meeting such criteria as
the Secretary determines to be appropriate. 42 U.S.C. §8622.

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Predecessor Programs to LIHEAP
The mid- to late-1970s, a time marked by rapidly rising fuel prices, also marked the beginning of
federal energy assistance funding for low-income households. The first national program to help
low-income households was created in early 1975 to assist families with energy conservation
primarily through home weatherization. This assistance was provided through a new Emergency
Energy Conservation Program (EECP), enacted as part of the Headstart, Economic Opportunity,
and Community Partnership Act of 1974 (P.L. 93-644). The funds were administered by the
Community Services Administration (CSA), the successor agency to the Office of Economic
Opportunity, which was responsible for many of the programs created as part of the 1964 war on
poverty. Beginning in 1977, funds were also made available through the CSA to help families
directly pay for fuel (as opposed to weatherization expenses) via a variety of programs. Each of
these programs had in common a focus on the need for heating assistance (versus cooling
assistance).
Congress continued to appropriate funds for energy assistance programs through FY1980, at
which point a new program, the Low Income Energy Assistance Program (LIEAP) was enacted
as part of the Crude Oil Windfall Profits Tax Act of 1980 (P.L. 96-223). LIEAP, which was
administered by the Department of Health and Human Services (HHS), was funded for one year,
FY1981, before the creation of LIHEAP. Like the CSA programs, LIEAP emphasized heating
over cooling needs. This preference was reflected in both the CSA program formulas and the
LIEAP set of formulas, which used variables that benefitted cold-weather states to determine how
funds would be distributed. The LIEAP set of formulas continues to have relevance for the way in
which LIHEAP funds are distributed. This section of the report describes these predecessor
programs to LIHEAP and their distribution formulas.

Community Services Administration Energy Assistance Programs
On January 4, 1975, President Ford signed into law the Headstart, Economic Opportunity, and
Community Partnership Act of 1974 (P.L. 93-644), which contained funds for a new program,
called the Emergency Energy Conservation Program (EECP). The program was to be
administered by the Community Services Administration (CSA), and its purpose was
to enable low-income individuals and families, including the elderly and the near poor, to
participate in energy conservation programs designed to lessen the impact of the high cost of
energy ... and to reduce ... energy consumption.

The law governing EECP listed a number of eligible activities in which states could participate,
including energy conservation and education programs; weatherization assistance; loans and
grants for the purchase of energy conservation technologies; alternative fuel supplies; and fuel
voucher and stamp programs. Despite the variety of activities that could be funded through the
program, the first CSA funding notice regarding the program limited eligible activities to
“winterizing” homes and to giving emergency assistance “to prevent hardship or danger to health

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due to utility shutoff or lack of fuel.”7 During the four years the EECP was funded, the majority
of funds were used for weatherization expenses. 8
EECP funds were distributed to states via a formula that benefitted those states with high heating
costs. One formula variable in particular, a measure of “coldness” called heating degree days,
benefitted cold-weather states. Heating degree days measure the extent to which a day’s average
temperature falls below 65° Fahrenheit. For example, a day with an average temperature of 50°
results in a measure of 15 heating degree days. Because heating degree days are higher in cold
weather states, including the heating degree day variable in a formula favors states with greater
heating needs. Squaring the heating degree days magnifies this effect.9 The EECP formula took
the number of population-weighted heating degree days in each state, squared them, and
multiplied the result by the number of households in poverty that owned their homes to determine
how funds would be allocated.10 The CSA acknowledged the emphasis on heating needs in its
formula, stating that the FY1975 allocation “was heavily weighted to the coldest areas ... ”11 In
the three fiscal years that followed the first appropriation for the EECP, from FY1976 through
FY1978, the CSA changed somewhat the way in which it allocated funds to the states; however,
the factors continued to favor cold-weather states through use of either heating degree days or
heating degree days squared.12
The first year that Congress specifically appropriated funds for direct assistance to help lowincome households (those at or below 125% of poverty) pay their energy costs (instead of funds
that went primarily for weatherization and conservation activities) was FY1977. The FY1977
Supplemental Appropriations Act (P.L. 95-26) provided $200 million for a Special Crisis
Intervention Program to be administered by CSA. States could use funds to make direct payments
to fuel providers on behalf of low-income families lacking the financial resources to pay their
energy bills. The CSA directed states to target households where utilities had been shut off (or
were threatened with shut off) and who could prove dire need due to large energy bills.13
Although the law did not reserve funds exclusively for heating costs, the way in which funds
were allocated to the states emphasized heating need. Funds were distributed to the states based
on a formula that used (1) heating degree days squared, (2) the number of households in poverty,
(3) the number of persons above age 65 with incomes below 125% of poverty, and (4) the relative
cost of fuel in the region. 14 Congress again appropriated $200 million for crisis intervention in
7

Community Services Administration, “Character and Scope of Specific Community Action Programs: Emergency
Energy Conservation Program,” Federal Register, vol. 40, no. 145, July 28, 1975, p. 31603.
8

See, for example, House Appropriations Committee, report to accompany H.R. 4877, the FY1977 Supplemental
Appropriations Act, 95th Cong., 1st sess., H.Rept. 95-68, March 11, 1977: “The funds in this program are used primarily
to purchase materials to insulate the homes of low-income families.”
9
For example, if a southern state experiences 700 heating degree days in a year and a northern state experiences 7,000,
the northern state has 10 times as many heating degree days as the southern state. However, if both numbers are
squared, the northern state has 100 times as many heating degree days as the southern state.
10
Community Services Administration, “Emergency Energy Conservation Program: Submission of Funding Plans,”
Federal Register, vol. 41, no. 208, October 27, 1976, p. 47096.
11
Federal Register, vol. 41, no. 208, October 27, 1976, p. 47096.
12
See Ibid., pp. 47096-47097.
13
Community Services Administration, “Special Crisis Intervention Program: General Information, Application
Procedures, and Post Grant Requirements,” Federal Register, vol. 42, no. 125, June 29, 1977, p. 33240.
14
The formula was described in the Senate Appropriations Committee report to accompany H.R. 4877, the FY1977
Supplemental Appropriations Act, 95th Cong., 1st sess., S.Rept. 95-64, March 24, 1977. The CSA implemented this
formula, which it described in guidance to the states. See the Federal Register, Ibid.

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both FY1978 and FY1979.15 In FY1978, funds were available to households with the need for
assistance as the result of an energy-related emergency such as lack of fuel, a natural disaster, fuel
shortages, and widespread unemployment.16 In FY1979, funds were made available to assist
families facing “substantially increased energy costs and/or life- or health-threatening situations
caused by winter-related energy emergencies.”17
In FY1980, Congress appropriated a total of $1.6 billion for energy assistance. Of this amount,
$400 million was appropriated for the Energy Crisis Assistance Program (ECAP, a CSA program
similar to the Special Crisis Intervention Program) through two separate appropriations.18 The
remainder, $1.2 billion, was appropriated as part of the FY1980 Department of the Interior
Appropriations Act (P.L. 96-126) to the Department of Health, Education, and Welfare (HEW, the
predecessor to HHS) for cash assistance and crisis intervention due to high energy costs. This
appropriation to HEW is sometimes referred to as Low Income Supplemental Energy Allowances.
Of this $1.2 billion, $400 million was to be distributed specifically to recipients of Supplemental
Security Income (SSI). The rest of the funds appropriated to HEW, approximately $800 million,
as well as the ECAP funds, were distributed to states on the basis of three factors: heating degree
days squared, the number of households below 125% of poverty, and the difference in home
heating energy expenditures between 1978 and 1979. The formula used to distribute the $400
million for SSI recipients used these same factors but also included the number of SSI recipients
in each state relative to the national total.
Table 1. Select Energy Assistance Formulas, FY1975-FY1980
Emergency Energy
Conservation Program:a
FY1975
(P.L. 93-644)
(Heating degree days)2 * number
of homeowners in poverty

Special Crisis
Intervention Program:b
FY1977
(P.L. 95-26)

Low Income Supplemental Energy
Allowances:c
FY1980
(P.L. 96-126)

(Heating degree days)2

½

(Heating degree days)2 * number of
households below 125% of poverty

Number of households in poverty

½

Difference in home heating
expenditures between 1978 and
1979

Number of persons over age 65 with
income less than 125% of poverty
Relative cost of fuel
Source: For the formula under P.L. 93-644, see Community Services Administration, “Emergency Energy
Conservation Program: Submission of Funding Plans,” Federal Register, vol. 41, no. 208, October 27, 1976, p.
47096. For the formula under P.L. 95-26, see Senate Appropriations Committee, report to accompany H.R.

15

Funds were appropriated through the FY1978 Supplemental Appropriations Act (P.L. 95-240) and in FY1979
through a continuing resolution (P.L. 95-482). In FY1978, Congress called the program Emergency Energy Assistance
Program and in FY1979 called it the Crisis Intervention Program (excluding the word “Special” from the title).
16
Community Services Administration, “Emergency Energy Conservation Program: Funding Requirements for
Emergency Energy Assistance Program,” Federal Register, vol. 43, no. 46, March 8, 1978, p. 9476.
17
Community Services Administration, “Emergency Energy Conservation Program: Fiscal Year 1979 Crisis
Intervention Program, “Federal Register, vol. 43, no. 250, December 28, 1978, pp. 60466-60467.
18
Congress appropriated $250 million for ECAP as part of an FY1980 Continuing Resolution (P.L. 96-123, referencing
the FY1980 Departments of Labor, Health and Human Services and Education Appropriations bill, H.R. 4389), and
appropriated an additional $150 million as part of the Department of the Interior Appropriations Act (P.L. 96-126).

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4877, the FY1977 Supplemental Appropriations Act, 95th Congress, 1st session, S.Rept. 95-64, March 24, 1977.
The formula for P.L. 96-126 is contained within the law.
Note: * Multiplied by.
a.

Of the funds appropriated for the Emergency Energy Conservation Program, 90% were distributed via the
formula, while the remaining 10% were divided among the 12 coldest states as measured by heating degree
days.

b.

The Special Crisis Intervention Program did not specify a weight for each of the four variables used to
determine allocations.

c.

Of the $1.6 billion appropriated for energy assistance in FY1980, $400 million was set aside for SSI
recipients. The formula to distribute those funds was ⅓ heating degree days2 * number of households below
125% of poverty, ⅓ difference in home heating expenditures between 1978 and 1979, and ⅓ SSI recipients
in each state relative to the national total.

Low Income Energy Assistance Program (LIEAP)
In April 1980, Congress replaced the patchwork energy assistance programs of the late 1970s
with one program, the Low Income Energy Assistance Program (LIEAP). LIEAP, the direct
predecessor program to LIHEAP, was established as part of the Crude Oil Windfall Profits Tax
Act of 1980 (P.L. 96-223). The program was introduced in the Senate as the Home Energy
Assistance Act (S. 1724) and was incorporated into H.R. 3919, the bill that would become the
Crude Oil Windfall Profits Tax Act, on the Senate floor. Like the energy assistance programs of
the late 1970s such as the Special Crisis Intervention Program and the Low Income Supplemental
Energy Allowances, LIEAP allocated funds to states in order to help low-income households pay
their home energy costs. Also like these predecessor programs, LIEAP allocated funds to states
using a method that put more emphasis on the heating needs of cold-weather states than it did on
cooling needs.
During the 1970s, home energy costs had increased substantially while wages failed to keep up.
According to the report from the Senate Committee on Labor and Human Resources that
accompanied the Home Energy Assistance Act (S. 1724), between 1972 and 1979, heating oil
prices increased by 293%, natural gas prices by 155%, and electricity prices by 91%, while wages
grew by 59% during the same period.19 During 1978, low-income households spent an estimated
18.4% of their income, on average, to pay their utilities, with expenditures in New England by
low-income households exceeding 30% of income. 20 The Senate Committee on Labor and Human
Resources held numerous hearings about the need for energy assistance to address the
“dramatically rising cost of home heating.”21
The resulting formula in S. 1724 reflected, in part, the committee’s concern that the problem of
rising energy costs were “most critical in areas with high home heating costs.”22 Although
subsequent changes were made to the LIEAP formula in S. 1724 before it was enacted, the need
for heating assistance continued to be paramount. The formula developed under LIEAP has been
19

Senate Committee on Labor and Human Resources, Home Energy Assistance Act, report to accompany S. 1724, 96th
Cong., 1st sess., S.Rept. 96-378, October 25, 1979, p. 2.
20
Ibid., p. 3.
21

Also discussed at the hearings was “the need for some level of assistance to be provided to certain eligible
households, where excessive heat is a factor in threatening life and health.” Ibid., p. 5. This did not figure prominently
into the formula, however.
22
Ibid., p. 12.

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used to distribute LIHEAP funds as recently as FY2007, so the variables used are important in
understanding the current formula and the way in which it is used to distribute funds.

The LIEAP Formula
When the Home Energy Assistance Act (S. 1724) was introduced, it contained a formula that
would have distributed funds to the states on the basis of half on residential energy expenditures
and half on heating degree days (the heating degree day measure is described in the previous
section “Community Services Administration Energy Assistance Programs”). However, on the
Senate floor, the program formula was amended, resulting in a multi-part formula under which
states would receive funds.

Formula Under P.L. 96-223
Under the final LIEAP formula in P.L. 96-223, states received funds under one of four alternative
formulas used to measure home energy need, depending on which one benefitted a state the most.
Three of the four formulas contained different combinations of several factors: residential energy
expenditures; heating degree days or heating degree days squared; and the number of low-income
households in the state.
•

Under the first formula alternative, half of the allocation was based on residential
energy expenditures and half on heating degree days squared multiplied by the
number of households at or below the Bureau of Labor Statistics (BLS) lower
living standard.23

•

Under the second formula alternative, one quarter of the allocation was based on
residential energy expenditures and three quarters based on heating degree days
squared multiplied by the number of households at or below the BLS lower
living standard.

•

Under the third formula alternative, half of the allocation was based on
residential energy expenditures and half based on heating degree days (not
squared) multiplied by the number of households with incomes at or below the
BLS lower living standard.

The fourth option guaranteed states a minimum benefit of $120 for each household that received
Aid to Families with Dependent Children (AFDC) or Food Stamp benefits. (See Table 2 for a
breakdown of these formulas.)
All formulas in P.L. 96-223 effectively gave preference to states with colder climates due to the
variables used. As discussed earlier in this report, the heating degree day variable is a measure of
temperatures below 65° F and therefore favors cold-weather states. Squaring the heating degree
day variable magnifies the discrepancy between warm- and cold-weather states. In addition,
23

The BLS determined the lower living standard income level through its annual family budgets, which it maintained
from 1947 to 1981. At the time the LIEAP program was enacted, the BLS developed annual family budgets assuming
three different standards of living: lower, intermediate, and higher. The budget was calculated using costs of consumer
goods including food, housing, transportation, clothing, and health care (unlike the federal poverty guidelines, which
are based on the amount of money needed to buy food). The budget was then adjusted for family size and the prices of
goods in various cities throughout the country. See David S. Johnson, John M. Rogers, and Lucilla Tan, “A Century of
Family Budgets in the United States,” Monthly Labor Review, 124, no. 5 (May 2001): 28-45.

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residential energy expenditures of all households (rather than energy expenditures of low-income
households only) are higher in cold-weather states because, on average, the proportion of poor
families in warm-weather states is higher than that in cold-weather states. However, the LIEAP
law did allow states to provide for cooling when households could demonstrate medical
necessity.24 Congress authorized LIEAP for one year, FY1981, at $3 billion, but funds were not
appropriated as part of P.L. 96-223.

Formula Under P.L. 96-369
Before the formula in P.L. 96-223 could be used to allocate funds, Congress introduced an
alternative method for computing the state distribution rates. It did so when it appropriated $1.85
billion in LIEAP funds for FY1981 in a continuing resolution (P.L. 96-369), in October of 1980,
six months after enactment of the Crude Oil Windfall Profits Tax Act. The new allocation method
was not described in P.L. 96-369, however. Instead, the continuing resolution referred to a House
Appropriations Committee report (H. Rept. 96-1244) accompanying another bill—the FY1981
Departments of Labor, Health and Human Services and Education Appropriations Act. It was in
this committee report that the specific formula components for LIEAP were laid out.25 H. Rept.
96-1244 did little to erode the de facto cold-weather states preference enacted in the original
LIEAP formula.
The first step in the new set of formulas was to determine each state’s share of funds using two
calculations set out in H. Rept. 96-1244 and assign states the greater of the two amounts.
•

Under the first formula alternative, half of the allocation was based on the
increase in home heating expenditures, and half was based on the number of
heating degree days squared times the population with income less than or equal
to 125% of poverty.

•

Under the second formula alternative, one quarter of the allocation was based on
total residential energy expenditures, and three quarters was based on heating
degree days squared multiplied by the number of low-income households in the
state.

The greater of the two percentages calculated using the formula in H. Rept. 96-1244 was then
assigned to each state. After adjusting state allotments proportionately so that the total allocation
reached 100% of funds available, the second step in the amended formula was to compare these
state allotments to 75% of the amount each state would receive under the formula in P.L. 96-223.
States would then receive the greater of these two amounts.
Although the alternative formulas under H.Rept. 96-1244used factors similar to those in P.L. 96223, the original set of formulas was slightly more favorable to warm-weather states. For
example, the BLS lower living standard was higher than 125% of poverty for most household

24

According to the law, “The State is authorized to make grants to eligible households to meet the rising costs of
cooling whenever the household establishes that such cooling is the result of medical need pursuant to standards
established by the Secretary.”
25
House Committee on Appropriations, report to accompany H.R. 7998, the FY1981 Departments of Labor, Health
and Human Services, and Education Appropriations Act, 96th Cong., 2nd sess., H. Rept. 96-1244, August 21, 1980, pp.
75-76.

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sizes, which benefitted the South, where the low-income population was higher.26 The original set
of formulas also provided for a minimum benefit to states on the basis of the number of AFDC
and Food Stamp recipient households, unconditioned on their household heating expenditures. In
addition, the inclusion of the increase in home heating expenditures in H. Rept. 96-1244
benefitted northeastern states, where heating oil prices had increased substantially.27
Table 2. Distribution of Funds Under LIEAP
P.L. 96-223

P.L. 96-369

Assign each state the option under which they receive the
greatest proportion of funds. If Options 2 and 3 both result in
a greater proportion than Option 1, assign the state the
lesser of Option 2 or 3.

Each state receives the greater of 75% of the
amount under P.L. 96-223 or Option 1 or Option 2
under P.L. 96-369.

Option 1:

Option 1:

½ Residential energy expenditures
½ (Heating degree days)2 * Households with
income ≤ BLS lower living standard

Option 2:

¼ Residential energy expenditures
¾ (Heating degree days)2 * Households with
income ≤ BLS lower living standard

Option 3:

½ Increase in home heating
expenditures from 1978-1980a
½ (Heating degree days)2 * Population
with income ≤ 125% of poverty

Option 2:

¼ Total residential energy
expenditures 1980
¾ (Heating degree days)2 *
Households with income ≤ BLS
lower living standard

½ Residential energy expenditures
½ Heating degree days * Households with
income ≤ BLS lower living standard

Option 4:

Funds sufficient for a minimum benefit of
$120 per AFDC- and/or Food Stamprecipient household

Source: The Crude Oil Windfall Profits Tax Act (P.L. 96-223) and the House Appropriations Committee
Report to Accompany H.R. 7998, the FY1981 Departments of Labor, Health and Human Services, and Education
Appropriations Bill, H.Rept. 96-1244, August 21, 1980.
Notes: * Multiplied by.
≤ Less than or equal to.
a.

H.Rept. 96-1244 did not specify which years would be used to determine residential energy expenditures;
1978 and 1980 were the years used by HHS.

Enactment of LIHEAP
In August 1981, the Omnibus Budget Reconciliation Act, P.L. 97-35, created LIHEAP, replacing
its predecessor, LIEAP. The new program was not substantially different from the previous
program. Some of the changes to the program included less restrictive federal rules and more
state flexibility in determining how to operate their LIHEAP programs. The program was
26

“The Low-Income Home Energy Assistance Program: An Analysis of the 1984 Reauthorization Issues,” Coalition of
Northeastern Governors, April 1984, p. 5.
27

H.Rept. 96-1244 did not specify the years between which the increase in home heating expenditures should be
measured. In implementing the formula, HHS measured the increase between 1978 and 1980.

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authorized at $1.85 billion for FY1982-FY1984. In FY1982, Congress appropriated $1.875
billion for LIHEAP; in FY1983, it appropriated $1.975 billion; and in FY1984, $2.075 billion.

Continued Use of the LIEAP Formula
When the formula for LIEAP was initially created in 1980 under the Crude Oil Windfall Profits
Tax Act (P.L. 96-223), it brought about a good deal of debate on the floor of the Senate, where the
formula provisions were added to the legislation.28 Discussion over the formula also occurred
leading up to the enactment of P.L. 96-369, the FY1981 continuing resolution that funded LIEAP
and amended the formula.29 Despite these earlier disagreements over formula allocations, the
process to enact LIHEAP in 1981 did not engender the same level of debate or result in a different
formula. Instead, the law creating LIHEAP provided that the allotment percentages for each state
would remain the same as they had been in FY1981 under the LIEAP formula as amended by P.L.
96-369. From FY1982 through FY1984, then, states continued to receive the same proportion of
funds that they received under the LIEAP formula.

The 1984 LIHEAP Reauthorization: A New Formula
Formula Discussions
When Congress began to consider reauthorizing LIHEAP in 1983, two aspects of the formula
were debated. First, legislators recognized that the multi-step LIEAP formula benefitted coldweather states relative to warm-weather states.30 This was due to the heating degree day variable
and the fact that residential energy costs of all households (instead of just low-income
households) were used under the various LIEAP formulas. The second debated aspect of the
formula centered on the appropriateness and timeliness of the data used in formula calculations.
In 1983, the energy information used to calculate state allotments was not the most current data
available. 31 For example, the most recent data the formula used were the change in the cost of
energy between 1978 and 1980, or the cost of energy in 1980, depending on the sub-formula one
chose to apply. No aspect of the formula took account of increased costs after 1980.32
Legislative sentiment in favor of changing the formula was evident, when, in September 1983,
the House adopted an amendment to the Emergency Immigration Education Act (H.R. 3520) that
would have adjusted the LIHEAP formula and resulted in a change in allocations to the states.
The amendment’s formula took into account the energy expenditures of poor families, which,
according to the amendment’s sponsor, Representative Carlos Moorhead (California), would
result in lower percentage allocations for 23 states, mostly in the Northeast and Midwest, gains

28
See, for example, Senate debate, Congressional Record, vol. 125, parts 24-25 (November 13-15, 1979), pp. 3208232086, 32275-32293, 32558-32565.
29
House debate, Congressional Record, vol. 126, part 18 (August 27, 1980), pp. 23502-23515.
30
See, for example, Comments of Rep. Billy Tauzin, Joint Hearing before the Subcommittees on Energy and
Commerce, Education and Labor, and Ways and Means, 98th Cong., 1st sess., February 24, 1983, pp. 119-120.
31
Report of the Committee on Energy and Commerce to accompany H.R. 2439, the Low-Income Home Energy
Assistance Amendments of 1984, 98th Cong., 2nd sess., H.Rept. 98-139, Part 2, May 15, 1984, p. 13.
32
Ibid., p. 4.

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for 27, primarily in the South, and the same allocation for one state. 33 The amendment was
eventually dropped from H.R. 3520 in conference with the Senate.

Introduction of a Hold-Harmless Level
Efforts to reauthorize LIHEAP had begun in April 1983 with the introduction of the Low-Income
Home Energy Assistance Amendments of 1984 (H.R. 2439). The bill was referred to two
committees: Education and Labor and Energy and Commerce. Within the Energy and Commerce
committee, two subcommittees held mark-ups: Fossil and Synthetic Fuels and Energy
Conservation and Power.
As introduced, H.R. 2439 did not contain changes to the LIHEAP formula. The Subcommittees
on Fossil and Synthetic Fuels and Energy Conservation and Power worked together to arrive at a
formula change, which had the effect of shifting funds from states in the Northeast to the South
and West. Unlike the previous set of formulas developed under LIEAP, the new formula directed
the Department of Health and Human Services to determine states’ allotments “using data relating
to the most recent year for which data is available.” Because the cost of heating oil remained
steady between 1981 and 1983, and the price of natural gas rose 33%, this meant that states in the
Northeast—where heating oil was the primary source of energy—would lose LIHEAP dollars,
while states in the South and the Midwest would gain under this provision.34 In addition,
population growth in the South (as well as its higher poverty rates) meant that southern states
would benefit from the use of more recent population data.
To offset the losses to certain states resulting from the use of current data, H.R. 2439 also
included a hold-harmless provision, or hold-harmless level; this provision ensured that if
appropriations were less than or equal to $1.875 billion, states would receive no less than their
allotment would have been under the old formula at this appropriations level. The bill
additionally increased the LIHEAP authorization level to $2.075 billion for FY1984, $2.26 billion
for FY1985, $2.625 billion for FY1987, and $2.8 billion for FY1988.

Introduction of a Hold-Harmless Rate
After the House Energy and Commerce Committee reported H.R. 2439 to the House floor—but
before the full House could act on the bill—the Senate passed its version of LIHEAP
reauthorization as part of the Human Services Reauthorization Act (S. 2565) on October 4,
1984.35 The Senate bill contained language very similar to H.R. 2439, but made several changes
and additions to the formula.
•

S. 2565 specified that states’ shares of LIHEAP funds would be based on the
home energy expenditures of low-income households, not on expenditures of all
households.

33
Congressional Record, vol. 129, part 17 (September 13, 1983), p. 23877. The greatest increases in percentage
allocations were for Florida at 51%, Texas at 44%, and Alabama at 37%. The states whose percentage allocations
decreased the most were Vermont at 32%, North Dakota at 24%, and New Hampshire at 23%.
34
“The Low-Income Home Energy Assistance Program: An Analysis of the 1984 Reauthorization Issues,” Coalition of
Northeastern Governors, April 1984, p. 9.
35

The final version of S. 2565 can be found in the Congressional Record, daily edition, vol. 130 (October 4, 1984), p.
S13393.

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•

The hold-harmless level was altered. S. 2565 directed that no state in FY1985
would receive fewer funds than it received in FY1984, and for FY1986 and
thereafter, no state would receive less than the amount they would have received
in FY1984 if the appropriations level had been $1.975 billion.

•

A second hold-harmless provision, or hold-harmless rate, was created. The
provision maintained the percentage allocated rather than a total funding level
allocated to each affected state.

The hold-harmless rate provision guaranteed that certain states would receive increased
allotments when appropriations reached $2.25 billion. States would qualify for this increase if
their total allotment percentage at an appropriation of $2.25 billion were less than 1%. These
states would instead receive the allotment rate they would have received at an appropriation of
$2.14 billion if that allotment rate were higher than the rate at $2.25 billion. In its debate about S.
2565, Senators referred to the hold-harmless rate as the “small States hold harmless,” as the intent
was to protect the small (population) states’ shares of LIHEAP funds.36 Otherwise, these states’
percentage shares of LIHEAP funds might decline, even as total appropriations increased. No rate
protection was guaranteed for more populous states beyond the aforementioned hold-harmless
level.
The Senate bill also included different authorization amounts for LIHEAP, $2.14 billion for
FY1985 and $2.275 billion for FY1986. After S. 2565 passed the Senate, the House debated and
passed the bill on October 9, 1984, retaining all the provisions included in the Senate version. The
bill became P.L. 98-558, the Human Services Reauthorization Act, on October 30, 1984.

LIHEAP Formula Statutory Language
Unlike the allocation formulas under LIEAP and the other energy assistance programs that
preceded LIHEAP, which dictated the use of specific variables to determine allotments to the
states, the LIHEAP formula as drafted by Congress gives more general guidance to HHS. The
LIHEAP statute, as enacted in P.L. 98-558 and codified at 42 U.S.C. §8623(a)(2) provides as
follows.
(A) a State’s allotment percentage is the percentage which expenditures for home energy by
low-income households in that State bears to such expenditures in all States, except that
States which thereby receive the greatest proportional increase in allotments by reason of the
application of this paragraph from the amount they received pursuant to P.L. 98-139 [the
FY1984 appropriation] shall have their allotments reduced to the extent necessary to ensure
that—
(i) no State for fiscal year 1985 shall receive less than the amount of funds the State
received in fiscal year 1984; and
(ii) no State for fiscal year 1986 and thereafter shall receive less than the amount of
funds the State would have received in fiscal year 1984 if the appropriations for this
subchapter for fiscal year 1984 had been $1,975,000,000, and
(B) any State whose allotment percentage out of funds available to States from a total
appropriation of $2,250,000,000 would be less than 1 percent, shall not, in any year when
36

Congressional Record, daily edition, vol. 130 (October 4, 1984), pp. S13415-S13416.

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total appropriations equal or exceed $2,250,000,000, have its allotment percentage reduced
from the percentage it would receive from a total appropriation of $2,140,000,000.

The next section of this report describes how funds are allocated to the states according to this
statutory language.

Determining LIHEAP Regular Fund Allotments
Using the “New” Formula
Current law as enacted in P.L. 98-558, sometimes referred to as the “new” LIHEAP formula,
provides for three different methods to calculate each state’s allotment of regular LIHEAP funds.
The calculation method used to determine state allotments depends upon the size of the
appropriation for that fiscal year. If the annual appropriation level does not exceed the equivalent
of a hypothetical FY1984 appropriation of $1.975 billion, then the allocation rates under the “old”
LIHEAP formula apply. This is sometimes referred to as “Tier I” of the LIHEAP formula. If
appropriations exceed a hypothetical FY1984 appropriation of $1.975 billion, then new formula
rates apply and are used to calculate state allotments. To calculate the new formula rates, the most
recent data available are used to determine the heating and cooling costs of low-income
households. When appropriations exceed the $1.975 billion level, but are less than $2.25 billion,
the new formula rates are used together with the hold-harmless level. This is sometimes referred
to as “Tier II” of the LIHEAP formula. Finally, if appropriations equal or exceed $2.25 billion,
the new rates apply and both the hold-harmless level together with the hold-harmless rate are in
effect. This is sometimes referred to as “Tier III” of the LIHEAP formula. This section describes
the steps involved in allocating LIHEAP funds to the states under the three tiers of the formula.

Calculating the New Formula Rates
As mentioned previously, when Congress considered a new formula for distributing LIHEAP
funds in 1983 and 1984, one of its concerns was the appropriateness and timeliness of the data
used in formula calculations. At the time, the energy information used to calculate state
allotments under the LIEAP formula did not use the most current data available. 37 For example,
the formula used the change in cost of energy between 1978 and 1980, but did not take account of
increased costs after 1980. In fact, the formula factors were fixed rates, and the LIHEAP statute at
that time had no provision for allowing newer information to be incorporated into the
determination of state allotments. The LIHEAP formula as created by P.L. 98-558 requires HHS
to use the most recent data available. HHS updates these data periodically. The most recent data
were provided to CRS in April of 2009.
As directed by the statute as enacted in 1984, the LIHEAP formula uses the home energy
expenditures of low-income households in each state as a first step in determining the proportion
of total regular funds that each state will receive. 38 Specifically, this means estimating the amount

37

Report of the Committee on Energy and Commerce to accompany H.R. 2439, the Low-Income Home Energy
Amendments of 1984, 98th Cong., 2nd sess., H.Rept. 98-139, Part 2, May 15, 1984, p. 13.
38

“[A] State’s allotment percentage is the percentage which expenditures for home energy by low-income households
in that State bears to such expenditures in all States ... ” 42 U.S.C. §8623(a)(2).

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of money that all low-income households (as defined by the LIHEAP statute39) in each state
spend on heating and cooling from all energy sources. This method accounts for variations in
heating and cooling needs of the states, the types of energy used, energy prices, and the lowincome population and their heating and cooling methods. The process for capturing the
expenditures of low-income households for the most current year possible involves the following
steps.
•

Total Residential Energy Consumption. The first step in calculating new
formula rates is determining total residential energy consumption for each
heating and cooling source in every state. Residential energy consumption is
usually measured in terms of the total amount of British Thermal Units (Btus)
used in private households and generally captures energy used for space and
water heating, cooling, lighting, refrigeration, cooking, and the energy needed to
operate appliances. The most recent data used in calculating LIHEAP formula
rates come from the 2006 Energy Information Administration (EIA) State Energy
Data System consumption estimates.

•

Temperature Variation. The next step in determining the formula rates involves
adjusting the amount of energy consumed for each fuel source by temperature
variation in each state. This is done by using a ratio consisting of the 30-year
average heating and cooling degree day data to each state’s share of the most
recent year’s average heating and cooling degree days. A heating degree day
measures the extent to which a day’s average temperature falls below 65°F and a
cooling degree day measures the extent to which a day’s average temperature
rises above 65°F.40 For example, a day with an average temperature of 50°F
results in a measure of 15 heating degree days; a day with an average temperature
of 80°F results in a measure of 15 cooling degree days. The purpose of the
adjustment to fuel consumption is to account for abnormally warm or cool years,
where energy usage might attain extreme values. This information is collected by
the National Oceanic and Atmospheric Administration. The most recent year’s
average heating and cooling degree day data are from 2006, and the 30-year
average was computed from 1971 to 2000.

•

Heating and Cooling Consumption. As mentioned above, total residential
energy consumption encompasses other uses in addition to heating and cooling
(e.g. operation of appliances). So the next step in calculating LIHEAP formula
rates is to derive the portion of fuel consumed specifically to heat and cool homes
as opposed to other uses. The EIA, as part of the Residential Energy
Consumption Survey (RECS), uses an “end use estimation methodology” to
estimate the amount of fuel used for heating and cooling (among other uses). The
most recent information on heating and cooling consumption comes from the
2005 RECS.41

•

Low-Income Household Heating and Cooling Consumption. After estimating
heating and cooling consumption for all households, the next step is to calculate
heating and cooling consumption in Btus for low-income households. The

39
The LIHEAP statute considers households with income at or below 150% of poverty or 60% of state median income
(whichever value is greater) to be low income. 42 U.S.C. §8624(b)(2)(B).
40
A state’s heating and cooling degree data are weighted by population in the state.
41
For more information about the RECS, see the EIA website at http://www.eia.doe.gov/emeu/recs/.

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Census Bureau prepares a special sample for HHS of the fuel sources used by
low-income households. The most recent information on low-income households
and the fuel sources they use comes from the 2006 American Community Survey.
In addition, low-income consumption data are adjusted to account for the fact
that low-income households might use more or less of a fuel source than is used
by households on average. This is done using consumption data from the 2005
RECS.
•

Total Spending on Heating and Cooling. To arrive at the amount of money that
low-income households spend on heating and cooling, the number of Btus used
by low-income households that were estimated in the previous step are multiplied
by the average fuel price for each fuel source. The total amount spent on heating
and cooling by low-income households for each fuel source is then added
together to arrive at total spending for each state. Regional energy price variation
can be significant, and the formula takes expected expenditure differences into
account. This information is collected by the EIA and published in the State
Energy Data System Consumption, Price, and Expenditure Estimates. 42 The most
recent price data used to calculate formula rates are from 2006.

•

New Formula Rate. Finally, these expenditure data are used to estimate the
amount spent by low-income households on heating and cooling in each state
relative to the amount spent by low-income households on heating and cooling in
all states. The calculated proportion becomes the new formula percentage, or
rate, for each state. Table 3 at the end of this section shows both the rates under
the “old” formula (column (a)) and the most recent “new” formula rates (column
(b)), received by CRS from HHS in April 2009. To see how the formula rates for
each state have changed in recent years, see Table 4 (it follows Table 3).

These new formula rates are used to allocate LIHEAP funds to the states if the annual
appropriation exceeds the equivalent of a hypothetical FY1984 appropriation of $1.975 billion.
However, these new formula rates do not represent the exact proportion of funds that states will
receive under the new formula. The ultimate allotments are determined after application of the
both the hold-harmless level and hold-harmless rate, described in the next section. The new rates
are the starting point for determining how funds will be allocated to the states.

Using the New Formula Rates to Allocate Funds to the States
The LIHEAP new formula rates that HHS calculates using the most current data available do not
necessarily represent the proportion of funds that states will receive. State allotments depend
upon the application of the two hold-harmless provisions in the LIHEAP statute. Some states
must have their share of funds ratably reduced in order to hold harmless those states that would,
but for the hold-harmless provisions, lose funds. Other states see a gain in their share of funds
because they benefit from the hold-harmless provisions. The application of the hold-harmless
provisions depends upon the size of the appropriation for a given fiscal year. These appropriation
level triggers are described below.

42

The EIA’s state data tables are available at http://www.eia.doe.gov/emeu/states/_seds.html.

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Tier I: Below $1.975 Billion
Current law requires that for fiscal years in which the regular LIHEAP fund appropriation is
equivalent to a hypothetical FY1984 appropriation of $1.975 billion or less, states receive the
same percentage of funds that they would have received at that appropriation level under the
“old” LIHEAP formula.43 This FY1984 appropriation of $1.975 billion referred to in the LIHEAP
statute is hypothetical because this was not the amount actually appropriated in FY1984. The
actual FY1984 appropriation was $2.075 billion. In addition, the current year appropriation that is
“equivalent to” a hypothetical FY1984 appropriation of $1.975 billion is not exactly $1.975
billion. In FY1984, with the exception of funds provided to the territories, all LIHEAP regular
funds were distributed to the states. Since then, two other funds have become part of the regular
fund distribution. These are funds for training and technical assistance and for the leveraging
incentive grants (which includes REACH grants) to the states. This means that an appropriation
that is equivalent to a hypothetical FY1984 appropriation of $1.975 billion must account for these
new funds. Assuming that funds for leveraging incentive/REACH grants is $27 million and
training and technical assistance is $300,000 (the amounts allocated to these funds in FY2009),
then the equivalent of an FY1984 appropriation of $1.975 billion is approximately $2.0023
billion.44
The LIHEAP formula in FY1984 distributed funds by giving states the same share of funds that
they received in FY1981 under the predecessor program, the Low Income Energy Assistance
Program (LIEAP). Table 3, at the end of this section of the report, shows rates under the old
formula in column (a). For example, at an appropriation at or below the equivalent of a
hypothetical FY1984 appropriation of $1.975 billion, Alabama would receive 0.86% of total
funds, Alaska would receive 0.55% of total funds, and so on. Table A-1, column (a) reports the
dollar amount of funds that each state would have received in FY1984 had the regular fund
appropriation been $1.975 billion.

Tier II: From $1.975 Billion up to $2.25 Billion
If the regular LIHEAP appropriation exceeds a hypothetical FY1984 appropriation of $1.975
billion for the fiscal year, all funds are to be distributed under a different methodology, using the
new set of rates described earlier. In addition, a hold-harmless level applies to ensure that certain
states do not fall below the amount of funds they would have received at the equivalent of a
hypothetical FY1984 appropriation of $1.975 billion. Table 3, at the end of this section, shows
whether a state benefits from the hold-harmless level. This is indicated by a “Y” in column (c),
while the dollar amount of funds those states receive by being held harmless appears in column
(d). For example, Alabama is not held harmless, while California is held harmless. The dollar
amount of funds that California receives pursuant to the hold-harmless level is $91.001 million.
But for the hold-harmless level, California would receive less than this dollar amount at its new
formula rate at certain appropriation levels. Eventually, when appropriations increase sufficiently,

43

It is important to understand, however, that although the new formula rates are always applied to all appropriations,
when appropriations are below a hypothetical FY1984 appropriation of $1.975 billion, the result of the current law’s
hold-harmless provisions is that states receive the same allotment percentages that they did under the old formula. See
U.S. Department of Health and Human Services, Low Income Home Energy Assistance Program: Report to Congress
for FY1987, p. 133.
44
This amount is arrived at by adding $27 million and $300,000 to $1.975 billion.

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the allotments for states that are held harmless will exceed their hold harmless amounts. This
appropriation level varies for each state.
The hold-harmless level is achieved by reducing the allocation of funds to those states with the
greatest proportional gains under the new formula rates.45 For example, under the most recent
LIHEAP formula rates, states with the greatest proportional gains were Florida, Texas, and
Nevada. Depending on the appropriation level, these states (and others with the greatest gains)
may then have their allotments reduced to hold harmless those states that would otherwise see
reduced benefits. So although these states with the greatest proportional gains will see their
LIHEAP allotments increase under the new formula, their allotments may not increase to reach
their new formula rates (column (b) of Table 3).
Columns (b) and (c) of Table A-1 show estimated allotments to the states at hypothetical
appropriations levels under Tier II of the LIHEAP formula. Column (b) shows the estimated
allotment of funds that each state would receive when the regular fund appropriation is at $2.14
billion and column (c) shows the estimated allotment of funds when the regular fund
appropriation is just under $2.25 billion ($2,249,999,999).

Tier III: At or Above $2.25 Billion
The LIHEAP statute stipulates additional requirements in the method for distributing funds when
the appropriation is at or above $2.25 billion. At this level, all of the provisions specified in the
Tier II allocation methodology are in place, including the change in the formula factors and the
hold-harmless level. In addition, a new hold-harmless rate is applied. That is, for all appropriation
levels at or above $2.25 billion, states that would have received less than 1% of a total $2.25
billion appropriation must be allocated the percentage they would have received at a $2.14 billion
appropriation level. 46 (This assumes the percentage at $2.14 billion is greater than the percentage
originally calculated at the hypothetical $2.25 billion appropriation; this is not true for all states
that receive less than 1% of the $2.25 billion appropriation.) Then that state will receive the $2.14
billion allotment proportion for all appropriation levels at or above $2.25 billion. This holdharmless rate ensures a state specific share of the total available funds.
As with the Tier II funding level, the allocations to the states with the greatest proportional gains
are then ratably reduced again, using the methodology described in the Tier II discussion, until
there is no funding shortfall. Column (e) of Table 3 shows which states benefit from the holdharmless rate, indicated by a “Y,” while column (f) shows the proportion of funds that those states
receive. For example, Idaho benefits from the hold-harmless rate and receives 0.587% of the total
appropriation when appropriations are at or above $2.25 billion.
The application of the hold-harmless rate creates another layer of discontinuity in the allocation
rates. Columns (d) through (h) of Table A-1 in Appendix A show estimated allotments to states
45
“States which thereby receive the greatest proportional increase in allotments ... shall have their allotments reduced
to the extent necessary to ensure that ... no State for fiscal year 1986 and thereafter shall receive less than the amount of
funds the State would have received in fiscal year 1984 ...” 42 U.S.C. §8623(a)(2)(A)(ii).
46
“[A]ny State whose allotment percentage out of funds available to States from a total appropriation of
$2,250,000,000 would be less than 1 percent, shall not, in any year when total appropriations equal or exceed
$2,250,000,000, have its allotment percentage reduced from the percentage it would receive from a total appropriation
of $2,140,000,000.” 42 U.S.C. §8623(a)(2)(B).

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at various hypothetical appropriations levels above at or above $2.25 billion. Column (d) shows
the estimated allotment of funds that each state receives when the regular appropriation is at
$2.25 billion after the hold-harmless rate is applied. Columns (e) through (h) show the estimated
allotment each state would receive at $2.5 billion, $3.0 billion, $4.0 billion, and $5.1 billion.

Implementation of the “New” LIHEAP Formula
Until FY2006, appropriations for regular LIHEAP funds had only exceeded the equivalent of a
hypothetical FY1984 appropriation of $1.975 billion in 1985 and 1986; therefore, from FY1987
through FY2005, and again in FY2007, states continued to receive the same percentage of
LIHEAP funds that they received under the program’s predecessor, LIEAP (see column (a) of
Table 3 for these proportions). In FY2006, funds were distributed under the “new” LIHEAP
formula when Congress appropriated $2.48 billion in regular funds for the program. In FY2008,
perhaps due to an oversight, the new formula was again used to distribute funds. The FY2008
Consolidated Appropriations Act (P.L. 110-161) failed to authorize a set-aside called leveraging
incentive grants. As a result, the funds for those grants were added to the LIHEAP regular funds,
triggering the new formula.47 In FY2009, the Consolidated Security, Disaster Assistance, and
Continuing Appropriations Act (P.L. 110-329) appropriated $4.51 billion in regular funds.
However, the law further specified that $840 million be distributed according to the “new”
LIHEAP formula, with the remaining $3.67 billion distributed according to the proportions of the
“old” formula established by LIEAP. For FY2010, the President has proposed to fund LIHEAP
regular funds at $2.41 billion, which would also involve application of the new formula. See
Table C-1 in Appendix C of this report for the distribution of funds to the states in FY2006
through FY2009 and for estimated allocations under the President’s FY2010 budget proposal.
Table 3. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, 2009
Hold-Harmless Levela

State

“Old”
Allotment
Rate (%)
(a)

“New”
Allotment
Rate (%)
(b)

Subject to
HoldHarmless
Level?
(c)

Hold-Harmless Rate

HoldHarmless
Level
($Millions)
(d)

Subject to
HoldHarmless
Rate?
(e)

HoldHarmless
Rate (%)
(f)

Alabama

0.860

1.582

N

—

N

—

Alaska

0.549

0.575

N

—

N

—

Arizona

0.416

1.018

N

—

N

—

Arkansas

0.656

0.884

N

—

N

—

California

4.614

4.479

Y

91.001

N

—

Colorado

1.609

1.333

Y

31.729

N

—

Connecticut

2.099

2.205

N

—

N

—

Delaware

0.279

0.375

N

—

N

—

District of
Columbia

0.326

0.181

Y

6.428

Y

47

0.305

For more information about this issue, see Appendix C of this report.

Congressional Research Service

17

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The LIHEAP Formula: Legislative History and Current Law

Hold-Harmless Levela

State

“Old”
Allotment
Rate (%)
(a)

“New”
Allotment
Rate (%)
(b)

Subject to
HoldHarmless
Level?
(c)

Hold-Harmless Rate

HoldHarmless
Level
($Millions)
(d)

Subject to
HoldHarmless
Rate?
(e)

HoldHarmless
Rate (%)
(f)

Florida

1.361

4.728

N

—

N

—

Georgia

1.076

2.620

N

—

N

—

Hawaii

0.108

0.150

N

—

N

—

Idaho

0.628

0.396

Y

12.376

Y

0.587

Illinois

5.809

4.843

Y

114.565

N

—

Indiana

2.630

2.147

Y

51.872

N

—

Iowa

1.864

1.028

Y

36.762

N

—

Kansas

0.856

0.978

N

—

N

—

Kentucky

1.369

1.243

Y

26.994

N

—

Louisiana

0.879

1.324

N

—

N

—

Maine

1.360

1.127

Y

26.815

N

—

Maryland

1.607

1.965

N

—

N

—

Massachusetts

4.198

3.757

Y

82.797

N

—

Michigan

5.515

5.040

Y

108.770

N

—

Minnesota

3.973

2.023

Y

78.363

N

—

Mississippi

0.737

0.974

N

—

N

—

Missouri

2.320

2.014

Y

45.762

N

—

Montana

0.736

0.295

Y

14.517

Y

0.688

Nebraska

0.922

0.547

Y

18.180

Y

0.862

Nevada

0.195

0.500

N

—

N

—

New
Hampshire

0.795

0.612

New Jersey

3.897

3.995

N

—

N

—

New Mexico

0.521

0.458

Y

10.270

Y

0.487

12.725

9.520

Y

250.974

N

—

North
Carolina

1.896

2.766

North Dakota

0.800

0.246

Y

15.770

Y

0.747

Ohio

5.139

4.893

Y

101.350

N

—

Oklahoma

0.791

1.236

N

—

N

—

Oregon

1.247

0.715

Y

24.591

N

—

Pennsylvania

6.835

5.993

Y

134.810

N

—

Rhode Island

0.691

0.635

Y

13.629

Y

0.646

South Carolina

0.683

1.278

N

—

N

—

New York

Congressional Research Service

Y

N

15.672

—

Y

N

0.743

—

18

 .
The LIHEAP Formula: Legislative History and Current Law

Hold-Harmless Levela

State

“Old”
Allotment
Rate (%)
(a)

“New”
Allotment
Rate (%)
(b)

Subject to
HoldHarmless
Level?
(c)

Hold-Harmless Rate

HoldHarmless
Level
($Millions)
(d)

Subject to
HoldHarmless
Rate?
(e)

HoldHarmless
Rate (%)
(f)

South Dakota

0.649

0.249

Y

12.808

Y

0.607

Tennessee

1.386

1.743

N

—

N

—

Texas

2.264

7.668

N

—

N

—

Utah

0.748

0.559

Y

14.745

Y

0.699

Vermont

0.596

0.418

Y

11.747

Y

0.557

Virginia

1.957

2.428

N

—

N

—

Washington

2.051

1.225

Y

40.450

N

—

West Virginia

0.906

0.663

Y

17.864

Y

0.847

Wisconsin

3.576

2.229

Y

70.538

N

—

Wyoming

0.299

0.137

Y

5.903

Y

0.280

Source: Congressional Research Service (CRS) calculations based on factors provided by the Department of
Health and Human Services (HHS) in April 2009.
Note: The actual proportion of total regular funds each state receives at funding levels above $1.975 billion may
differ substantially from the calculated new formula rate due to the hold-harmless provisions and the ratable
reductions to cover shortfall from these hold-harmless provisions.
a.

The states that benefit from the hold-harmless level vary depending on the amount appropriated for
LIHEAP regular funds. The states listed here benefit from the hold-harmless level when appropriations just
exceed the equivalent of an FY1984 appropriation of $1.975 billion.

Congressional Research Service

19

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The LIHEAP Formula: Legislative History and Current Law

Table 4. Recent State Allotment Rates Under the “New” LIHEAP Formula
Dates Based on Years in Which CRS Received Data from HHS

States

“Old”
Formula
Rates

2005

2007

2008

2009

Alabama

0.860%

1.722%

1.932%

1.650%

1.582%

Alaska

0.549

0.372

0.376

0.317

0.575

Arizona

0.416

0.838

0.992

0.813

1.018

Arkansas

0.656

0.929

1.082

0.910

0.884

California

4.614

6.255

5.690

5.303

4.479

Colorado

1.609

1.148

1.280

1.305

1.333

Connecticut

2.099

1.952

1.732

2.164

2.205

Delaware

0.279

0.432

0.435

0.453

0.375

District of
Columbia

0.326

0.321

0.309

0.328

0.181

Florida

1.361

3.583

4.187

3.781

4.728

Georgia

1.076

2.445

2.829

2.734

2.620

Hawaii

0.108

0.104

0.101

0.099

0.150

Idaho

0.628

0.330

0.386

0.331

0.396

Illinois

5.809

5.960

4.796

4.998

4.843

Indiana

2.630

2.204

2.209

2.128

2.147

Iowa

1.864

1.200

1.085

1.064

1.028

Kansas

0.856

1.094

1.105

1.106

0.978

Kentucky

1.369

1.811

1.688

1.621

1.243

Louisiana

0.879

1.679

1.704

1.514

1.324

Maine

1.360

0.929

0.722

0.908

1.127

Maryland

1.607

2.699

2.421

2.652

1.965

Massachusetts

4.198

3.117

3.043

3.311

3.757

Michigan

5.515

3.940

4.651

4.645

5.040

Minnesota

3.973

1.782

1.789

1.917

2.023

Mississippi

0.737

1.538

1.105

0.951

0.974

Missouri

2.320

2.431

2.497

2.309

2.014

Montana

0.736

0.392

0.414

0.441

0.295

Nebraska

0.922

0.539

0.598

0.558

0.547

Nevada

0.195

0.465

0.686

0.576

0.500

New
Hampshire

0.795

0.543

0.453

0.503

0.612

New Jersey

3.897

3.166

2.838

3.621

3.995

New Mexico

0.521

0.486

0.628

0.577

0.458

12.725

9.313

8.491

9.393

9.520

New York

Congressional Research Service

20

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The LIHEAP Formula: Legislative History and Current Law

States

“Old”
Formula
Rates

2005

2007

2008

2009

North
Carolina

1.896

3.247

3.186

3.261

2.766

North
Dakota

0.800

0.209

0.235

0.273

0.246

Ohio

5.139

4.992

4.512

4.803

4.893

Oklahoma

0.791

1.275

1.452

1.275

1.236

Oregon

1.247

0.839

1.008

0.750

0.715

Pennsylvania

6.835

5.380

5.174

5.731

5.993

Rhode Island

0.691

0.612

0.596

0.665

0.635

South
Carolina

0.683

1.418

1.425

1.349

1.278

South Dakota

0.649

0.275

0.268

0.235

0.249

Tennessee

1.386

1.893

2.055

1.801

1.743

Texas

2.264

5.752

7.095

6.524

7.668

Utah

0.748

0.555

0.648

0.599

0.559

Vermont

0.596

0.360

0.356

0.319

0.418

Virginia

1.957

2.956

2.817

3.041

2.428

Washington

2.051

1.264

1.621

1.204

1.225

West Virginia

0.906

0.973

0.960

0.907

0.663

Wisconsin

3.576

2.081

2.108

2.080

2.229

Wyoming

0.299

0.201

0.233

0.202

0.137

Source: State rate data were received by CRS from HHS in December of 2005, May of 2007, September of
2008, and April of 2009.

Congressional Research Service

21

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The LIHEAP Formula: Legislative History and Current Law

Appendix A. Estimated Allotments to the States
Under Various Hypothetical Appropriation Levels
Table A-1, below, shows estimated allocations to the states at various hypothetical appropriations
levels. In column (a) are allotments at the equivalent of a hypothetical FY1984 appropriation of
$1.975 billion—under current LIHEAP practice where funds are set aside for leveraging incentive
grants and training and technical assistance, the equivalent appropriation level is approximately
$2.0023 billion. The remaining columns show estimated allotments at appropriations of $2.14
billion, just under $2.25 billion, $2.25 billion, $3.0 billion, $4.0 billion, and $5.1 billion, the
amount at which the LIHEAP program was last authorized in P.L. 109-58.

Congressional Research Service

22

 .

Table A-1. LIHEAP Estimated State Allotments for Regular Funds
at Various Hypothetical Appropriation Levels
($ in millions)
Tier I

State

Hypothetical $1.975
Billion
in FY1984
(a)

Tier II

$2.14 Billion
(b)

Tier III

Just under $2.25
Billion
(c)

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$4.0 Billion
(g)

$5.1 Billion
(h)

Alabama

16.963

22.793

29.149

28.264

39.071

46.971

62.772

80.153

Alaska

10.828

12.133

12.765

12.765

14.201

17.072

22.816

29.133

Arizona

8.203

11.023

14.097

13.669

19.915

29.407

40.404

51.591

Arkansas

12.943

17.392

19.618

19.618

21.825

26.238

35.064

44.773

California

91.001

94.507

99.427

99.427

110.610

132.977

177.709

226.915

Colorado

31.729

31.729

31.729

31.729

32.914

39.569

52.880

67.521

Connecticut

41.392

46.530

48.953

48.953

54.459

65.471

87.495

111.721

Delaware

5.494

7.382

8.331

8.331

9.268

11.142

14.890

19.013

District of
Columbia

6.428

6.428

6.428

6.763

7.524

9.045

12.088

15.434

Florida

26.840

36.065

46.123

44.722

65.160

96.214

145.054

185.218

Georgia

21.221

28.515

36.467

35.360

51.519

76.072

103.927

132.703

Hawaii

2.137

2.872

3.331

3.331

3.706

4.455

5.954

7.603

Idaho

12.376

12.376

12.376

13.021

14.485

17.415

23.273

29.717

Illinois

114.565

114.565

114.565

114.565

119.588

143.770

192.133

245.332

Indiana

51.872

51.872

51.872

51.872

53.018

63.739

85.180

108.766

Iowa

36.762

36.762

36.762

36.762

36.762

36.762

40.782

52.074

Kansas

16.883

20.642

21.717

21.717

24.159

29.045

38.815

49.563

Kentucky

26.994

26.994

27.598

27.598

30.702

36.911

49.327

62.986

Louisiana

17.342

23.302

29.397

28.896

32.703

39.316

52.542

67.090

Maine

26.815

26.815

26.815

26.815

27.819

33.444

44.695

57.070

CRS-23

 .

Tier I

State

Hypothetical $1.975
Billion
in FY1984
(a)

Tier II

$2.14 Billion
(b)

Tier III

Just under $2.25
Billion
(c)

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$4.0 Billion
(g)

$5.1 Billion
(h)

Maryland

31.693

41.463

43.622

43.622

48.528

58.341

77.967

99.555

Massachusetts

82.797

82.797

83.399

83.399

92.779

111.540

149.061

190.335

108.770

108.770

111.882

111.882

124.466

149.633

199.969

255.339

Minnesota

78.363

78.363

78.363

78.363

78.363

78.363

80.252

102.472

Mississippi

14.543

19.541

21.622

21.622

24.054

28.918

38.645

49.346

Missouri

45.762

45.762

45.762

45.762

49.737

59.794

79.909

102.035

Montana

14.517

14.517

14.517

15.273

16.990

20.426

27.297

34.856

Nebraska

18.180

18.180

18.180

19.127

21.278

25.581

34.186

43.652

3.853

5.177

6.621

6.420

9.354

13.812

19.844

25.339

New Hampshire

15.672

15.672

15.672

16.488

18.342

22.051

29.469

37.629

New Jersey

76.865

84.286

88.674

88.674

98.648

118.596

158.491

202.375

New Mexico

10.270

10.270

10.270

10.805

12.020

14.451

19.312

24.659

250.974

250.974

250.974

250.974

250.974

282.630

377.705

482.288

North Carolina

37.403

50.257

61.402

61.402

68.308

82.121

109.745

140.133

North Dakota

15.770

15.770

15.770

16.591

18.457

22.189

29.653

37.864

101.350

103.229

108.604

108.604

120.819

145.250

194.111

247.858

Oklahoma

15.592

20.951

26.794

25.980

30.515

36.686

49.026

62.601

Oregon

24.591

24.591

24.591

24.591

24.591

24.591

28.349

36.199

Pennsylvania

134.810

134.810

134.810

134.810

147.980

177.903

237.749

303.579

Rhode Island

13.629

13.629

14.104

14.339

15.951

19.177

25.628

32.724

South Carolina

13.472

18.102

23.150

22.447

31.569

37.952

50.719

64.763

South Dakota

12.808

12.808

12.808

13.475

14.990

18.021

24.084

30.752

Tennessee

27.344

36.742

38.696

38.696

43.048

51.753

69.163

88.313

Texas

44.653

60.000

76.733

74.403

108.405

160.069

241.321

308.140

Michigan

Nevada

New York

Ohio

CRS-24

 .

Tier I

State

Hypothetical $1.975
Billion
in FY1984
(a)

Tier II

$2.14 Billion
(b)

Tier III

Just under $2.25
Billion
(c)

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$4.0 Billion
(g)

$5.1 Billion
(h)

Utah

14.745

14.745

14.745

15.512

17.257

20.747

27.726

35.403

Vermont

11.747

11.747

11.747

12.358

13.748

16.528

22.088

28.204

Virginia

38.606

51.234

53.901

53.901

59.964

72.089

96.339

123.015

Washington

40.450

40.450

40.450

40.450

40.450

40.450

48.587

62.041

West Virginia

17.864

17.864

17.864

18.794

20.908

25.136

33.591

42.892

Wisconsin

70.538

70.538

70.538

70.538

70.538

70.538

88.434

112.920

Wyoming

5.903

5.903

5.903

6.211

6.909

8.306

11.101

14.174

2,109.839

2,219.690

2,219.690

2,469.351

2,968.674

3,967.320

5,065.830

Total

1,972.33

Source: Congressional Research Service (CRS) calculations based on factors provided by the Department of Health and Human Services (HHS) in April 2009.
Notes: These estimates take into account current law, which allows HHS to set aside funds out of regular LIHEAP funds for territories, leverage incentive grants and
Residential Energy Assistance Challenge (REACH) grants and training and technical assistance. For each estimate, approximately 0.134% is allocated to the territories, $27
million to leveraging incentive and REACH grants, and $300,000 to training and technical assistance. Differing allocations to leveraging incentive and REACH grants could
change state allotments.

CRS-25

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The LIHEAP Formula: Legislative History and Current Law

Appendix B. Further Depiction of How State
Allotments Depend Upon Appropriation Levels
Figure B-1 graphically illustrates state allotments for three “typical” types of states over a range
of appropriations from $0 to $5.1 billion. Represented are (1) a hold-harmless level state, (2) a
hold-harmless level and rate state, and (3) a state whose increased allocations are ratably reduced
in order to maintain allocations for the hold-harmless level and rate states.
In the figure, there are three vertical areas. These areas separate the three levels of appropriations
(Tiers I-III) that are triggers under current law and were explained previously in this report. The
figure also graphs the three basic types of states. Reading from top to bottom of Figure B-1, these
three types of states are as follows.
•

Hold-Harmless Level Only States. These states are subject to only the holdharmless level provision. They do not qualify for the hold-harmless rate because
each state’s share of the regular funds at $2.25 billion is greater than 1%. An
example of a hold-harmless level only state is represented by the line that runs
from $0 to point G. The hold-harmless level is evident from point A to point F.
Here, despite increases in the appropriations level, the state allotment remains
fixed. In Table 3, these are the states that have a “Y” in the “Subject to holdharmless level?” column and a “N” in the “Subject to hold-harmless rate?”
column.

•

Ratable Reduction States. These states are subject to a ratable reduction. Their
new formula rate is greater than their old, FY1984, rate. An example of these
states is depicted by the line that runs from $0 to point H. There is a small
decrease in state allotments at point D that is attributable to the increased
shortfall on the distribution of funds that the hold-harmless rate imposes. In
Table 3, these are the states that have a “N” in the “Subject to hold-harmless
level?” column and a “N” in the “Subject to hold-harmless rate?” column.

•

Hold-Harmless Level and Rate States. These states are subject to both the holdharmless level and the hold harmless rate provisions. An example of a typical
level and rate state is shown by the line that runs from $0 to point I. The holdharmless level is evident by the fixed state allotment from point C to point E.
However, the (subtle) jump at exactly $2.25 billion signals that this state is
subject to the hold-harmless rate provision. After the allotment jump at $2.25
billion, the state’s allotment continues to increase (at a rate lower than the old
rate, but higher than the new rate). In Table 3, these are the states that have a
“Y” in the “Subject to hold-harmless level?” column and a “Y” in the “Subject
to hold-harmless rate?” column.

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Figure B-1. Estimated Low Income Home Energy Assistance (LIHEAP) Allocations at Various Hypothetical Appropriations
Level for Three Types of States
$120
Tier II hold-harmless level
Tier I

G
Tier III hold-harmless rate

$100
Hold-harmless
level only state

State Allotment
($ in millions)

$80

H
A

F
Ratably
reduced
state

$60

Hold-harmless
level and rate
state

$40
I

D
$20

B
C

E

$0
$0

$1,000

$2,000

$3,000
Appropriation
($ in millions)

Source: Figure created by CRS using allotment rates provided by HHS in April 2009.

CRS-27

$4,000

$5,000

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The LIHEAP Formula: Legislative History and Current Law

Appendix C. Actual LIHEAP Regular Fund
Allotments to the States, FY2006-FY2009, and
Estimated FY2010 Allotments
On May 7, 2009, the President released the FY2010 budget appendix, in which he proposed to
fund LIHEAP regular funds at $2.41 billion. Colum (f) of Table C-1 contains estimates of the
amount of funds that states would receive if this amount were to be appropriated for FY2010.
In the most recent regular fund appropriation for LIHEAP, the FY2009 Consolidated Security,
Disaster Assistance, and Continuing Appropriations Act (P.L. 110-329), Congress appropriated
$4.51 billion. However, of that amount, $840 million was to be distributed according to the “new”
formula and the remainder under the “old” formula proportions. Column (e) of Table C-1 shows
the amount of regular funds that each state received under P.L. 110-329.
In the FY2008 Consolidated Appropriations Act (P.L. 110-161), Congress appropriated $1.98
billion in LIHEAP regular funds.48 The first distribution to the states of the regular funds
appropriated in P.L. 110-161 occurred in December 2007; allocations were made on the basis of
the proportions of the “old” LIHEAP formula. The amount of funds that each state received under
this allotment is in column (c) of Table C-1. Then, on June 26, 2008, HHS announced that it
would distribute funds that were thought to have been allocated to leveraging incentive and
REACH grants in the FY2008 Appropriations Act as part of the regular fund formula grants.
Since the early 1990s, leveraging incentive and REACH grants have been made to states and
tribes on the basis of their ability to obtain non-LIHEAP resources for energy assistance
(leveraging incentive grants) and for increasing energy efficiency of low-income households
(REACH grants). In recent years, Congress has allocated about $27 million for these two funds.
However, in FY2008, P.L. 110-161 did not appropriate funds for leveraging incentive and
REACH grants. When HHS discovered that language to appropriate the funds was missing from
the law, it released the $26.7 million that would otherwise have been distributed as leveraging
incentive and REACH grants as part of the LIHEAP formula distribution. The addition of nearly
$27 million to the formula grants caused the funds to be released under the “new” LIHEAP
formula. Column (d) of Table C-1 shows the total amount of funds that each state received after
$26.7 million was added and funds were distributed under the new formula.
Column (b) of Table C-1 shows the amounts allocated to the states in FY2007 when Congress
appropriated $1.98 billion in regular LIHEAP funds as part of a year-long continuing resolution
(P.L. 110-5). Funds were distributed according to the proportions of the old formula. Column (a)
shows the amount allotted to each state in FY2006, when $2.48 billion was appropriated for
LIHEAP regular funds through two different laws. The FY2006 Departments of Labor, Health
and Human Services, and Education Appropriations Act (P.L. 109-149) appropriated $1.98 billion
for LIHEAP and a bill to make available funds in the Deficit Reduction Act of 2005 for LIHEAP
(P.L. 109-204) appropriated $500 million.

48
P.L. 110-161 contained an across-the-board rescission of 1.747% that reduced the stated amounts appropriated for
most Departments of Labor, Health and Human Services, and Education programs. See Division G, Section 528 of P.L.
110-161. The $1.98 billion appropriation for regular funds was the amount available after this rescission.

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Table C-1. LIHEAP Actual State Regular Fund Allotments for
FY2006 through FY2009 and Estimated FY2010 Allotments
($ in millions)
FY2008
Allotments
After
6-26-08:
$1.98
billiond
(d)

FY2009
Allotments:
$4.5 billione
(e)

FY2010
Estimated
Allotments
President’s
Request:
$2.41 billion
(f)

FY2006
Allotments:
$2.48
billiona
(a)

FY2007
Allotments:
$1.98
billionb
(b)

FY2008
Allotments
Prior to
6-26-08:
$1.98 billionc
(c)

Alabama

31.310

16.769

16.774

17.111

60.063

36.897

Alaska

12.572

10.704

10.707

10.828

23.568

13.684

Arizona

15.142

8.110

8.112

8.275

29.047

17.844

Arkansas

22.765

12.796

12.799

13.057

36.497

21.030

California

153.184

89.963

89.985

91.797

225.894

106.584

Colorado

31.729

31.367

31.375

31.729

63.474

31.729

Connecticut

47.809

40.920

40.930

41.754

95.783

52.476

Delaware

10.141

5.431

5.433

5.542

17.384

8.931

District of
Columbia

7.852

6.355

6.356

6.484

14.653

7.250

Florida

49.542

26.534

26.541

27.075

95.037

58.383

Georgia

39.170

20.979

20.985

21.407

75.141

46.160

Hawaii

2.555

2.113

2.113

2.137

4.652

3.571

Idaho

14.370

12.235

12.238

12.376

26.939

13.958

Illinois

145.959

113.259

113.287

114.565

237.236

115.235

Indiana

53.986

51.280

51.293

51.872

103.609

51.872

Iowa

36.762

36.343

36.352

36.762

67.803

36.762

Kansas

26.798

16.690

16.695

17.031

45.349

23.280

Kentucky

44.347

26.686

26.693

27.230

68.353

29.585

Louisiana

32.010

17.144

17.148

17.494

57.196

31.513

Maine

26.815

26.509

26.516

26.815

49.457

26.815

Maryland

58.499

31.332

31.340

31.971

101.296

46.762

Massachusetts

82.797

81.853

81.873

82.797

162.981

89.402

108.770

107.529

107.556

108.770

222.412

119.935

Minnesota

78.363

77.469

77.488

78.363

144.528

78.363

Mississippi

26.843

14.377

14.381

14.670

39.011

23.178

Missouri

59.541

45.240

45.251

45.762

103.541

47.927

Montana

16.856

14.351

14.355

14.517

31.598

16.372

Nebraska

21.109

17.973

17.978

18.180

39.573

20.504

7.112

3.809

3.810

3.887

13.643

8.381

18.197

15.493

15.497

15.672

34.112

17.675

State

Michigan

Nevada
New

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The LIHEAP Formula: Legislative History and Current Law

FY2008
Allotments
After
6-26-08:
$1.98
billiond
(d)

FY2009
Allotments:
$4.5 billione
(e)

FY2010
Estimated
Allotments
President’s
Request:
$2.41 billion
(f)

FY2006
Allotments:
$2.48
billiona
(a)

FY2007
Allotments:
$1.98
billionb
(b)

FY2008
Allotments
Prior to
6-26-08:
$1.98 billionc
(c)

New Jersey

77.540

75.988

76.007

76.865

166.690

95.058

New Mexico

11.925

10.153

10.156

10.360

24.901

11.583

250.974

248.112

248.173

250.974

475.935

250.974

North
Carolina

69.038

36.976

36.985

37.730

123.243

65.822

North
Dakota

18.310

15.590

15.594

15.770

34.325

17.785

122.259

100.194

100.219

101.350

220.588

116.421

Oklahoma

28.780

15.415

15.418

15.729

49.007

29.405

Oregon

24.591

24.311

24.317

24.591

45.355

24.591

Pennsylvania

134.810

133.273

133.306

134.810

274.925

142.594

Rhode Island

15.825

13.473

13.477

13.629

30.209

15.371

South
Carolina

24.867

13.318

13.322

13.590

47.702

29.304

South Dakota

14.871

12.662

12.665

12.808

27.878

14.445

Tennessee

46.363

27.033

27.039

27.584

73.723

41.482

Texas

82.421

44.144

44.155

45.044

158.110

97.129

Utah

17.120

14.576

14.580

14.745

32.094

16.629

Vermont

13.639

11.613

11.616

11.747

25.568

13.248

Virginia

71.259

38.166

38.175

38.944

118.084

57.781

Washington

40.450

39.988

39.998

40.450

74.603

40.450

West Virginia

23.818

17.660

17.665

17.935

40.584

20.147

Wisconsin

70.538

69.733

69.750

70.538

130.096

70.538

Wyoming

6.854

5.836

5.838

5.903

12.850

6.658

1,950.314

1,977.027

4,476.302

2,379.473

State
Hampshire

New York

Ohio

Total

2,449.16

1,949.83

Source: Department of Health and Human Services (HHS) final regular fund allocations for FY2006 through
FY2009. FY2010 levels are CRS estimates based on data received from HHS in April 2009. Actual and estimated
allocations to the states include tribal allotments.
a.

The total regular fund appropriation for FY2006 was $2.48 billion, $1.98 billion of which was appropriated
in P.L. 109-149, and $500 million in P.L. 109-204. Initially, P.L. 109-149 appropriated $2.0 billion for regular
funds, but the amount was subject to a 1% across-the-board rescission, resulting in a $1.98 billion
appropriation (P.L. 109-148). In addition, both training and technical assistance and the leveraging incentive
and REACH funds were reduced by 1% in column (a).

b.

Congress approved a year-long continuing resolution for FY2007 (P.L. 110-5), which was enacted on
February 15, 2007. The law provided that LIHEAP receive the same amount of funds for FY2007 that was
appropriated for FY2006 in P.L. 109-149, as reduced by a 1% rescission (P.L. 109-148).

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c.

The initial allotments for FY2008 were slightly greater than for FY2007, despite the similar appropriations
levels, due to a 1.747% across-the-board rescission for most Departments of Labor, Health and Human
Services, and Education programs. See P.L. 110-161, Division G, Section 528. This meant that set asides for
leveraging incentive and REACH grants, and for training and technical assistance, were slightly reduced from
FY2007 levels.

d.

On June 26, 208, HHS released an additional $26.7 million in formula grants to the states. These funds had
been set aside for leveraging incentive and REACH grants until HHS realized that Congress had not
appropriated these funds in P.L. 110-161. As a result, distributions were re-calculated under the “new”
LIHEAP formula, and additional funds were provided to the states.

e.

Congress appropriated approximately $4.5 billion for LIHEAP as part of a continuing resolution (P.L. 110329). Of this amount, $840 million was allocated under the “new” LIHEAP formula, with the remainder
allocated according to the proportions of the “old” LIHEAP formula.

Author Contact Information
Libby Perl
Analyst in Housing Policy
eperl@crs.loc.gov, 7-7806

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