Order Code 94-211 EPW
Updated September 5, 2002
CRS Report for Congress
Received through the CRS Web
The Low-Income Home Energy
Assistance Program (LIHEAP)
Emilie Stoltzfus
Analyst in Social Legislation
Domestic Social Policy Division
Summary
The Low-Income Home Energy Assistance program (LIHEAP), established in 1981
by Title XXVI of P.L. 97-35 and currently authorized through FY2004, is a block grant
program under which the federal government gives states and other jurisdictions annual
grants to operate home energy assistance programs for low-income households. The
most current Department of Health and Human Services (HHS) data show an estimated
3.9 million households received winter heating/crisis assistance in FY2000. According
to the National Energy Assistance Directors Association (which represents state
LIHEAP directors), the number of households receiving this assistance in FY2001 may
be as high as 5 million. This larger number is consistent with a substantial increase in
program funds available for FY2001.
On August 9, 2002 the Administration released $100 million in LIHEAP
emergency contingency funds to meet energy needs in states most affected by the severe
summer heat. Funds were allocated to 33 states and the District of Columbia based on
the severity of the heat and the number of low-income households in those jurisdictions.
As of September 5, 2002 a total of $500 million in LIHEAP contingency funds remain
available for distribution. Of that amount $200 million was appropriated for FY2002
only and, if not released before September 30, 2002, will not be available after that date.
On July 18, 2002 the Senate Appropriations Committee approved a bill (S. 2766)
that would maintain current year funding levels of $1.7 billion in regular LIHEAP funds
and $300 million in LIHEAP contingency funds. The President’s FY2003 budget
proposes to cut regular LIHEAP funding to $1.4 billion but would keep the $300 million
funding level for contingency funds. On September 4, Representative Young introduced
a House Labor-HHS-Education bill (H.R. 5320), which recommends funding at the
same level requested by the president.
The President’s FY2003 budget states a desire to revise the formula used to allocate
LIHEAP funds and an April 2002 Senate floor colloquy (between Senators Landrieu and
Kennedy) included a promise to discuss the formula in the next LIHEAP reauthorization
debate. This report provides background on LIHEAP and will be updated periodically.
Congressional Research Service ˜ The Library of Congress

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Recent Developments and Current Issues
Contingency Funds Release. President Bush notified Congress of his intent to
release LIHEAP contingency funds on August 8; one day later HHS released this money
to 33 states and the District of Columbia. The funds were distributed to each state whose
temperatures between June 23, 2002 and August 3, 2002 were significantly higher than
the state’s 30-year average temperature for that time period. Among the 34 jurisdictions
that met this criteria, funds were allocated based on the severity of the heat wave and the
number of households with incomes below 125% of the federal poverty level.1
The August release of $100 million in LIHEAP contingency funds was made out of
the $300 million appropriated for this account as part of FY2002 appropriations (P.L.
107-116). That money was made available for FY2002 use only and the remaining $200
million will not be available for release after the end of this fiscal year (September 30,
2002). Separately, Congress appropriated $300 million in LIHEAP contingency funds as
a part of the FY2001 Supplemental Appropriations (P.L. 107-20). This money was
designated as “available until expended” and continues to be available for release.
Funding. The Senate Appropriations Committee voted on July 18, 2002 to maintain
FY2003 regular LIHEAP funding at the current year’s $1.7 billion level (S. 2766). In its
FY2003 budget the Bush Administration proposes to reduce the FY2003 appropriation
for regular LIHEAP funds to $1.4 billion. Administration budget documents state that the
lower request for regular LIHEAP funds was “in response to Department of Energy
forecasts of lower fuel costs.” Senate appropriators also approved $300 million in FY2003
LIHEAP contingency funds (S. 2766). That is the current year appropriation for
contingency funds and is also the amount proposed in the President’s FY2003 budget.
The Senate report accompanying S. 2766, (S.Rept. 107-216, released July 22, 2002)
notes that the two most recent conference agreements appropriating LIHEAP contingency
funds “encouraged the administration to release contingency funds . . . due to the pressing
additional energy assistance needs of millions of eligible families.”2 Stating that “the
[statutory] definition of emergency has been met in many states, the Committee states it
is “disappointed by the unwillingness of the administration to release” LIHEAP
contingency funds; the committee directs HHS “to provide a report within 60 days after
the enactment of this bill identifying the sources of data used for considering release of
contingency funds for each of the parts of the emergency definition.”
On September 4, House Appropriations Chair Young, introduced an FY2003 Labor-
HHS-Education bill (H.R. 5320) which mirrors the President’s request of $1.4 billion in
regular LIHEAP funds and $300 million in contingency funds. The bill was introduced
prior to committee consideration.
LIHEAP formula. The President’s FY2003 budget indicates the Administration’s
interest in changing the formula used to distribute LIHEAP funds and, in particular, in
“basing the formula on current home energy expenditures paid by low-income
1 For a more detailed explanation of the criteria used to distribute the fund, a list of the qualifying
states and the allocations made go to [http://www.acf.dhhs.gov/programs/liheap/im02-17.htm].
2 See conference reports accompanying H.R. 2216 and H.R. 3061 in the 107th Congress.

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households.” As part of an April floor colloquy, Senator Landrieu – citing the fact that the
money is now allocated based on dated assumptions – asked that the LIHEAP formula be
revisited; Senator Kennedy, who chairs the Senate HELP committee currently charged
with reauthorizing LIHEAP in FY2004, promised to hold hearings to address this issue.
(See Congressional Record, April 16, 2002 S2716-S2717). In June Representative Shows
introduced a bill (H.R. 4898) that would change the LIHEAP formula by lowering the
current statutory “hold harmless” provision from $1.975 billion to $1 billion.
As amended in 1984 (P.L. 98-558), LIHEAP statute provides that funds be allotted
to states based on current home energy expenditures of low-income households. However,
it also states that unless regular LIHEAP funds reach $1.975 billion in any given fiscal
year (after FY1985) no state can receive less funds than it would have received under the
previous allotment formula. Because regular LIHEAP funds have not exceeded $1.975
billion since FY1986, the prior formula for allocating funds has generally governed the
percentage share of funds states receive. First developed for use in FY1981, that formula
relied on then available population, weather, and energy expenditure data and included
factors that gave greater weight to states with colder temperatures.
Funding Authorization and GAO Study. A final conference agreement on
energy legislation (H.R. 4) is not expected before late September. In late July, however,
conferees voted to make certain LIHEAP provisions a part of their final agreement. These
include a proposal, passed as part of both the House and the Senate energy bills, that
would raise LIHEAP’s regular funds annual authorization level from $2 billion to $3.4
billion and would extend this funding authorization level through FY2005. The conferees
also agreed to a House proposal that would mandate a General Accounting Office (GAO)
study to determine: to what extent LIHEAP and other government energy subsidies
encourage or discourage energy conservation; to what extent education could increase
conservation in low-income households who opt to receive supplemental income instead
of LIHEAP; the benefit in energy efficiency and savings that can be achieved through
annual maintenance of heating and cooling appliances in the homes of those receiving
LIHEAP; and the energy conservation loss that results from structural, health, or
environmental inadequacies in buildings that receive LIHEAP weatherization assistance.
Senate energy bill conferees, however, have apparently receded from their chamber’s
proposal to raise the authorized annual funding level for LIHEAP contingency funds
(from $600 million to $1 billion) and to allow HHS to reserve $750,000 in regular
LIHEAP funds (instead of the current $300,000) for technical assistance and training.
Performance measurement. The LIHEAP statute provides that states are to use
available federal LIHEAP funds to serve households that pay high home energy costs
(relative to their low incomes) and that include “vulnerable” members (defined as very
young, disabled, or frail elderly individuals). With this legislative mandate in mind, HHS
has developed performance goals and measures to enable it to quantify state performance.
The initial performance goals are to increase the percent of LIHEAP recipient households
having: 1) a member 5 years of age or younger; 2) a member 60 years of age or older; and
3) the lowest incomes and the highest energy costs. Achievement of these goals will be
measured using specially developed benefit targeting and burden targeting indexes. The
agency is working to establish FY2001 baseline data and intends to measure FY2002
performance. This information is intended to help states improve program outreach and
management, and to assist HHS in determining how best to offer technical assistance.

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Federal LIHEAP Provisions and Program Operation
LIHEAP is a federally-funded block grant program that helps ease the energy cost
burden of low-income households. Federal requirements are minimal and leave most
important program decisions to the states, the District of Columbia, U.S. territories and
commonwealths, and Indian tribes and tribal organizations (collectively referred to as
grantees) who receive federal funds. The federal government (HHS) may not dictate how
grantees implement”assurances” that they will comply with general federal guidelines.
Federal eligibility standards and grantee responsibility. Federal law limits
eligibility to households with incomes up to 150% of the federal poverty income
guidelines (or, if higher, 60% of the state median income). States may adopt lower
income limits, but no household with income below 110% of the poverty guidelines may
be excluded. States may separately choose to make eligible for LIHEAP assistance any
household or households where at least one member is a recipient of Temporary
Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food
Stamps, or certain needs-tested veteran’s programs. Within these limits, grantees decide
which, if any, assistance categories to include, what income limits to use, and whether to
impose other eligibility tests. The statute gives priority for aid to households with the
greatest energy needs or cost burdens, especially those that include disabled or frail
elderly individuals or young children. Federal standards require grantees to treat owners
and renters “equitably,” to adjust benefits for household income and home energy costs,
and to have a system of “crisis intervention” assistance for those in immediate need.
LIHEAP assistance does not reduce eligibility or benefits under other aid programs.
Federal rules also require outreach activities, coordination with the Department of
Energy’s weatherization program, annual audits and appropriate fiscal controls, and fair
hearings for those aggrieved. Grantees decide the mix and dollar range of benefits, choose
how benefits are provided, and decide what agencies will administer the program.
Participation and Benefits. Funds are available for four types of energy
assistance to eligible households: help paying heating or cooling bills, low-cost
weatherization projects (limited to 15% of allotment unless grantee has waiver for up to
25%), services to reduce need for energy assistance (limited to 5% of allotment), and
assistance with energy-related emergencies. According to an HHS analysis of data from
the Census Bureau’s March 1999 Current Population Survey, approximately 24% of
LIHEAP recipients are households that do not receive any other public assistance through
TANF, Supplemental Security Income, Food Stamps or subsidized housing and some
35% are elderly households.
HHS uses state data to estimate participation levels. For FY2000 (most recent year
available) an estimated 3.6 million households received assistance with heating payments,
318,000 received cooling aid, 920,000 received winter crisis aid, 88,000 received
summer crisis aid, and 91,000 received weatherization assistance. (It is not possible to
calculate from this data a single number of households aided because any one household
may have received multiple kinds of assistance.) The percentage of federally eligible
households receiving LIHEAP winter heating/crisis benefits declined from 31% in 1983
to an estimated 13% in FY2000. Greater program funding during the 2000-2001 heating
season ( $855 million in LIHEAP contingency funds were made available to all states)
may have allowed the percent of eligible households served in FY2001 to reach 17%.
Regular LIHEAP funds appropriated for FY2002 were $300 million above the regular

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funds available for FY2002 but because no contingency funds were released during the
heating season, state LIHEAP administrators experienced an effective cut in resources.
The most recent available state data compiled by HHS shows an average
heating/winter crisis benefit of $271 in FY2000 (compared to $237 in FY1999) and an
average cooling/summer crisis benefit of $206 (compared to $137 in FY1999). The
constant (1981) dollar value of average winter/heating crisis benefits declined from $213
in the first year of the program (FY1981) to a low of $112 in FY1998; in FY2000 its
constant dollar (1981) value was $140.
Authorization. In 1998, P.L. 105-285 reauthorized LIHEAP, without major
program changes and set annual funding authorization for FY2002-FY2004 at $2 billion.
In 1994 (P.L. 103-252), Congress stipulated that LIHEAP benefits and outreach activities
target households with the greatest home energy needs (and costs), enacted a separate and
permanent contingency funding authorization of $600 million each fiscal year and
allowed those funds to be allocated to one or more states at the discretion of the HHS
secretary. The 1994 law also established the “Residential Energy Assistance Challenge”
(REACH) grant program to increase efficiency of energy usage among low-income
families and reduce their vulnerability to homelessness, and other health and safety risks
due to high energy costs. Other significant amendments to the program were authorized
in 1990 under P.L. 101-501. That act created the Incentive Program for Leveraging Non-
Federal Resources, which offers supplemental grants to states that win reduced energy
rates for low-income households. Although the statute provides for separate funding
authorization of between $30 million to $50 million for these grants, in practice,
leveraging incentive grants have been funded at between $22 million to $30 million out
of the program’s regular fund appropriations. P.L. 101-501 also authorized a July to June
program year (or forward) funding of LIHEAP to allow state program directors to plan
for the fall/winter heating season with knowledge of available money. This program year
language was subsequently removed although the statute now states that money
appropriated in a given fiscal year is to be made available for obligation in the following
fiscal year. Congress last provided advance appropriations for LIHEAP in the FY2000
appropriations cycle and neither the President’s budget nor the Senate Appropriations
committee has proposed advance funding as part of the FY2003 appropriations process.
Funding. The LIHEAP statute authorizes regular appropriations, which are
allocated to all states based on a statutory formula, and contingency funds, which are
allocated to one or more states at the discretion of the Administration. Each grantee
receives a percentage share of the annual federal LIHEAP funds. If the annual regular
federal appropriation is below $1.975 billion (which has been the case for regular
LIHEAP funds since FY1986), states receive the same percentage share that they received
in FY1984. The formula that determined the FY1984 percentage shares considered data
available at that time pertaining to: heating degree days squared, total residential energy
expenditures, home heating costs, number of low-income households, and other factors.
If the annual regular appropriation were to exceed $1.975 billion, a different formula for
calculating states’ percentage shares (and including more current data) would begin to
take effect.3 In either case regular federal grants to states may be supplemented with other
federal dollars, including: contingency funds, leveraging incentive and REACH grants,
3 For more information see CRS Report RS20893, The Low-Income Home Energy Assistance
Program: How are State Allotments Determined?


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funds left over from the previous fiscal year, and rarely (if ever) used authority to transfer
funds from other federal block grants.
Contingency Fund Releases. LIHEAP contingency funds are separately
authorized and may be allocated to one or more states based on their needs (as determined
by the HHS secretary). These funds may only be released at the discretion of the
Administration and are authorized “to meet the additional home energy assistance needs
of one or more States arising from a natural disaster or other emergency.” The term
“emergency” is defined in the LIHEAP statute to include: a natural disaster; a significant
home energy supply shortage or disruption; significant increases in the cost of home
energy, home energy disconnections, participation in public benefit programs, or
unemployment; or an “event meeting such criteria as the [HHS] Secretary may determine
to be appropriate.”
Table 1 shows a history of LIHEAP funding for each of FY1982-FY2003.
Table 1. LIHEAP Funding Trends: FY1982-FY2003
($ in thousands)
Regular funds
Regular funds
Contingency
Contingency
Fiscal
President’s
authorization
Regular funds
funds
funds
year
request
levela
appropriation
appropriated
dispersed
1982
$1,400,000
$1,875,000
$1,875,000
1983
1,300,000
1,875,000
1,975,000
1984
1,300,000
1,875,000
2,075,000
1985
1,875,000
2,140,000
2,100,000
1986
2,097,765
2,275,000
2,100,000
1987
2,097,642
2,050,000
1,825,000
1988
1,237,000
2,132,000
1,531,840
1989
1,187,000
2,218,000
1,383,200
1990
1,100,000
2,307,000
1,443,000
1991
1,050,000
2,150,000
1,415,055
195,180
195,180
1992
1,025,000
2,230,000
1,500,000
300,000
0
1993
1,065,000
ssanb
1,346,030
595,200
0
1994
1,507,408
ssanb
1,437,402
600,000
300,000
1995
1,475,000
2,000,000
1,319,202
600,000
100,000
1996
1,319,204
2,000,000
900,000
180,000
180,000
1997
1,000,000
2,000,000
1,000,000
420,000
215,000
1998
1,000,000
2,000,000
1,000,000
300,000
160,000
1999
1,300,000
2,000,000
1,100,000
300,000
175,299
2000
1,400,000
ssanb
1,100,000
900,000
744,350c
2001
1,400,000
ssanb
1,400,000
600,000
455,650
2002
1,400,000
2,000,000
1,700,000
300,000d
100,000d
2003
1,400,000
2,000,000
Source: Table prepared by the Congressional Research Service (CRS) based on HHS Budget Justifications.
a Amounts listed are for regular funding only. In 1994 Congress enacted a permanent $600 million annual
authorization for contingency funding. Prior to 1994 contingency funds were sometimes available.
b Such sums as necessary.
c President Clinton released $400 million of these FY2000 contingency funds in late September 2000
making it effectively available to states in FY2001.
d As of September 5, 2002. On that date $500 million in contingency funds remained available for release.
Of that amount $200 million were appropriated for FY2002 only (P.L. 107-116) and if not released
prior to September 30, 2002 will no longer be available for use. The remaining $300 million was
appropriated in the FY2001 supplemental (P.L. 107-20) and remain “available until expended.”