Order Code RL31865
CRS Report for Congress
Received through the CRS Web
The Low-Income Home Energy Assistance
Program (LIHEAP): Program and Funding Issues
Updated February 5, 2004
Emilie Stoltzfus
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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The Low-Income Home Energy Assistance Program
(LIHEAP): Program and Funding Issues
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 statute authorizes appropriations for LIHEAP grants, which
are allotted to all states, and for contingency funds, which are allotted to one or more
states at the Administration’s discretion and based on emergency need.
On February 5 the Department of Health and Human Services (HHS) announced
it was releasing an additional $191.5 million in LIHEAP funds. A little more than
half of this money ($99.4 million) is the total amount of these contingency funds
appropriated for FY2004 (P.L. 108-199). A part of these contingency funds ($40
million) was released to all states under the regular block grant formula and the
remainder went to 18 states and the District of Columbia, which experienced an
unusually cold January. The remaining funds ($92.1 million) are part of the regular
FY2004 block grant and became available in late January after the enactment of the
final appropriation. That law provided a higher funding level than had been assumed
by HHS for the earlier release of FY2004 funds under the continuing resolution and
the additional regular funds went to all states to complete their first and second
quarter LIHEAP funding requests.
The final FY2004 appropriation for LIHEAP is $1.789 billion in regular funds
and $99.4 million in contingency funds. As of February 5, HHS has made available
a total of $1.642 billion of the total FY2004 regular and contingency funds
appropriation. There are no additional contingency funds available. Remaining
regular funds will be released as part of third and fourth quarter allotments, however
many states request all or most of their LIHEAP funding in the first two quarters. The
President’s FY2005 budget requests a little more than $2 billion for LIHEAP. This
includes $200 million in contingency funds, $1.8 billion for regular block grant
distribution and $500,000 to fund an evaluation of the program.
Authorization for LIHEAP is set to expire at the end of FY2004. In October the
Senate Health, Education, Labor and Pensions (HELP) Committee ordered S. 1786
reported (S.Rept. 108-210). The bill would reauthorize LIHEAP at an annual funding
level of $3.4 billion in each of FY2004-FY2006 and at such sums as necessary
through FY2010. It would also make specific increases in energy costs or extremes
in weather an automatic trigger for release of contingency funds; extend authorization
for the Residential Energy Assistance Challenge (REACH) Option under LIHEAP
and require the General Accounting Office (GAO) to evaluate this initiative; and
require HHS to evaluate LIHEAP performance, develop a protocol for states to
collect certain consumer statistics from energy distributors and study other specific
factors. The House Education and Workforce Committee held a hearing on LIHEAP
in July but has not debated specific reauthorization language. This report provides
background on LIHEAP and will be updated as significant program events or
legislative activities occur.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Federal eligibility standards and grantee responsibility . . . . . . . . . . . . . 1
Kinds of energy assistance available . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Participation and benefit levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Funds and allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Legislative history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FY2004 funds appropriated and released . . . . . . . . . . . . . . . . . . . . . . . . 9
President’s FY2005 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Program authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Current Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Release of contingency funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LIHEAP formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Performance measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Tables
Table 1. LIHEAP Heating/Winter Crisis Aid — Eligible and Served
Households, Benefit Received, and Costs Offset, Selected Years . . . . . . . . 4
Table 2. Level of Funds Appropriated and Resulting Distribution
Factors for LIHEAP Regular Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3. LIHEAP Funding Trends: FY1982-FY2005 . . . . . . . . . . . . . . . . . . . . 16

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The Low-Income Home Energy
Assistance Program (LIHEAP):
Program and Funding Issues
Introduction
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 available Department of Health and Human
Services (HHS) estimate of households served by LIHEAP is for FY2001 when some
4.8 million households received winter heating/crisis assistance. In that same year
about 250,000 households received cooling assistance and some 87,000 received
summer crisis aid.1 According to a survey done by the National Energy Assistance
Directors Association (which represents state LIHEAP directors), the number of
households receiving winter heating assistance in FY2002 stood at approximately 4.6
million. No comparable cooling assistance data are available for FY2002.
LIHEAP is a federally funded block grant program designed to 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 greater, 60% of the state median income). States may adopt
lower income limits, but no household with income below 110% of the poverty
guidelines may be considered ineligible. States may separately choose to make
eligible for LIHEAP assistance any household where at least one member is a
recipient of Temporary Assistance for Needy Families (TANF), Supplemental
Security Income (SSI), Food Stamps, or certain needs-tested veteran’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
1 Some households that received cooling aid may also have received summer crisis aid and
there is no available unduplicated estimate of households receiving cooling/summer crisis
aid.

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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 Assistance Program, annual audits and appropriate fiscal controls,
and fair hearings for those aggrieved. Grantees decide the mix and dollar range of
benefits, choose how benefits are provided, and decide what agencies will administer
the program.2
Kinds of energy assistance available. Funds are available for four types
of energy assistance to eligible households:
! help paying heating or cooling bills;
! low-cost weatherization projects (e.g. window replacement or other
home-energy related repair; limited to 15% of allotment unless
grantee has waiver for up to 25%);
! services to reduce need for energy assistance ( e.g. needs assessment,
counseling on how to reduce energy consumption; limited to 5% of
allotment); and
! help with energy-related emergencies (winter or summer crisis aid).
The majority of LIHEAP funding is used to offset home heating costs. In FY2001
approximately 75% of all LIHEAP funds were used to provide heating assistance or
crisis aid related to heating needs; all states (including the District of Columbia)
provided some heating assistance and 48 offered crisis aid related to heating needs.
In that same year, approximately 3% of funds were used for cooling/summer crisis
aid; 16 states offered some cooling assistance and 6 offered summer crisis aid. Also
in FY2001 about 10% of total LIHEAP funds were used for weatherization services,
(provided by 45 states); and just under 1% of the FY2001 funds were used to offer
services to reduce the need for energy assistance (provided by 21 states).3
2 Information regarding state LIHEAP program characteristics and contacts is available at
[http://www.ncat.org/liheap/sp.htm].
3 Remaining available LIHEAP funds were spent on administration (7%), carried over for
use in FY2002 (3%), or were related to REACH/leveraging incentive activities (1%).
Percentages are based on total amount of states’ estimated LIHEAP obligations for FY2001
($2.3 billion). Two states offering weatherization services in FY2001 and one state offering
cooling assistance in that year used funds that were obligated in FY2000. See U.S.
Department of Health and Human Services, Administration for Children and Families,
Office of Community Services, Division of Energy Assistance, Low Income Home Energy
Assistance Program: Report to Congress for FY2001, Aug. 2003, p. iii, v, 14. (This report
hereafter cited as LIHEAP: Report to Congress, FY2001.)

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Participation and benefit levels. States reported that in FY2001 (most
recent year for which HHS-compiled data are available) approximately 4.4 million
households received assistance with heating payments; 250,000 received cooling aid;
1.4 million received winter crisis aid; 87,000 received summer crisis aid; and
97,000 received weatherization assistance. HHS uses these data to estimate a
combined total of households that received winter crisis and/or heating assistance —
4.8 million households in FY2001. However, because one household may receive
multiple kinds of assistance, it is not possible to add each of the household counts
together to determine the number of unduplicated households aided by any type of
LIHEAP aid.4 Overall, since the LIHEAP program began in the early 1980s, both the
percentage of eligible households served and absolute number of households
receiving heating/winter crisis assistance have been in decline. However, in FY2001
both figures increased. (See Table 1 below.)
In FY2001, the average household LIHEAP heating/winter crisis benefit was
$364 (compared to $271 in FY2000 and $237 in FY1999). The constant dollar value
of LIHEAP heating/winter assistance benefits declined for much of the program’s
history but has risen somewhat in the most recent fiscal years. Over the life of the
program both an increase in the size of the total home heating bill for households that
receive LIHEAP heating/winter assistance and a decrease in the value of assistance
benefits has eroded the amount of home heating expenses covered by LIHEAP.
However, across this same program life span, the average portion of household
income used by recipients of LIHEAP heating/winter assistance declined
significantly — from a high of 8.3% in FY1983 to a low of 3.3% in FY2000. Thus,
while LIHEAP benefits cover a smaller portion of the bill than in earlier years, the
portion of household income required for home heating by LIHEAP-recipient
households is less than when the program began. After taking into account their
LIHEAP benefit, LIHEAP-recipient households spent an average of 1.0% of their
total income for heating in FY2000 compared to 2.6% in FY1983. (See Table 1
below.)
The Census Bureau’s March 2001 Current Population Survey (CPS), indicates
that among all households receiving LIHEAP heating assistance about 37% had at
least one member 60 years of age or older; about 39% had at least one disabled
member; and some 20% included at least one child 5 years of age or younger. The
March 2001 CPS data also showed that a minority of households receiving LIHEAP
heating assistance also received other kinds of federal aid: an estimated 12% received
TANF; 27% received SSI; and 27% lived in rent-subsidized or public housing.5
4 LIHEAP: Report to Congress, FY2001, p. 18.
5 LIHEAP: Report to Congress, FY2001, pp. 19-21.

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CRS-4
Table 1. LIHEAP Heating/Winter Crisis Aid — Eligible and
Served Households, Benefit Received, and Costs Offset,
Selected Years
Fiscal Year
1983
1987
1990
1993
1997
1998
1999
2000
2001
Households
Number receiving aid
6.8
6.8
5.8
5.6
4.3
3.9
3.6
3.9
4.8
(in millions)
Number federally
22.2
24.1
25.4
28.4
29.0
29.1
29.0
29.4
29.9
eligible (in millions)
Federally eligible and
31%
28%
23%
20%
15%
13%
12%
13%
16%
receiving aid
Benefit Levels
Average benefit
$225
$216
$209
$201
$213
$213
$237
$270
$364
(nominal dollars)
Average benefit
$209
$176
$147
$129
$118
$117
$128
$140
$187
(constant 1981
dollars)a
Costs Offset
Portion of winter
18%
19%
15%
11%
9%
9%
9%
9%
NAc
heating bill covered
by LIHEAP (for all
federally eligible
households)b
Before receiving LIHEAP benefit
Portion of household
income required for
8.3%
5.8%
4.5%
4.7%
4.0%
3.4%
3.3%
3.3%
NAc
home heating (for
LIHEAP-recipient
After receiving LIHEAP benefit
households)
2.6%
2.2%
2.0%
2.4%
1.9%
1.3%
1.1%
1.0%
NAc
Source: Table compiled by Congressional Research Service based on information provided by or
included in the U.S. Department of Health and Human Services, Administration for Children and
Families, Office of Community Services, Division of Energy Assistance, LIHEAP Home Energy
Assistance Notebooks for FY1998, FY2000, and FY2001; and LIHEAP Report to Congress, FY2001.
a The constant dollars are based on the 1981 value of the benefit (using the CPI-U index).
b. These percentages represent the portion of combined home heating costs for all households
federally eligible for LIHEAP that was offset by LIHEAP heating/winter crisis assistance.
c. FY2001 data on these trends are not available from the LIHEAP Home Energy Assistance Notebook
for FY2001.

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CRS-5
Apart from federal funding levels (discussed below), a variety of factors help
determine to what extent LIHEAP is able to meet its stated goal of assisting low-
income households in meeting their home energy needs.6 These include:
! the cost of energy for a given household (influenced by energy price
fluctuations and variation in kinds of fuels used);
! the amount of energy consumed (influenced by severity of the
weather, energy efficiency of housing, and expected standards of
comfort);
! the number of eligible households (influenced by population size
and health of the economy).
Funds and allocation. The LIHEAP statute authorizes regular funds
appropriations, which are allocated to all states based on a statutory formula, and
contingency fund appropriations, which are allocated to one or more states at the
discretion of the Administration. It also authorizes a smaller amount of funds for
incentive grants to states who leverage non-federal resources for their energy
assistance programs and allows states to draw on certain other resources.

Regular funds. Regular funds are distributed to states according to a three-
tier formula included in the LIHEAP statute and based on the level of funds
appropriated in a given fiscal year.7 Although provision of cooling assistance has
been authorized from the beginning of LIHEAP (initially only when medically
necessary), the original method for distributing regular funds was largely based on
home heating needs of low-income households. The statute also did not provide for
the use of updated population, home heating need, or other data.
In 1984 (P.L. 98-558) Congress enacted a new distribution formula that requires
taking into account the home energy needs of low-income households — whether
heating or cooling related — and also provides that the data used for calculating the
distribution should be the most recent available. However, in order for these new
measures to be used, Congress also stipulated that — for FY1986 and succeeding
years — no state could receive less money than it would have received in FY1984
(had the LIHEAP funding in that year been $1.975 billion). Funding levels for
LIHEAP have only twice exceeded this level and thus the original distribution
formula has been used in every year beginning with FY1987.
Should a higher funding level bring the new distribution formula into effect, the
use of current data, particularly updated population numbers, as well as the much
increased weight given to cooling needs, would significantly alter the share of
LIHEAP funds that states receive. At the same time, should funding increase to
6 See also CRS Report RS20761, LIHEAP and Residential Energy Costs, by Bernard Gelb.
7 States are defined to include the District of Columbia. Indian tribes receive funds out of
state allotments that are proportionate to their share of LIHEAP-eligible households in the
state. Before state allotments are made the statute provides that at least one-tenth (but not
more than one-half) of 1% of the total appropriation must be set-aside for energy assistance
in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin
Islands.

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CRS-6
certain specified amounts, the three-tier formula now written in law includes
provisions designed to maintain an absolute dollar as well as percentage share (or
rate) amount of funding that a state could expect to receive. These stipulations are
referred to as “hold-harmless” provisions. 8 The three-tier current law formula is
described in more detail below.
Tier I. For funding levels at or below $1.975 billion9 states receive a fixed share
of the total funds (or a rate) that was first used in FY1981. This Tier 1 rate has been
used to distribute regular LIHEAP funds in every program year except FY1985 and
FY1986. It was created using formula factors that resulted in greater proportionate
funding for cold-weather states with the highest number of low-income households.
Tier II. For appropriations above $1.975 billion10 and up to $2.25 billion a Tier
II rate applies. This distribution rate is based on the most current available data
regarding home energy expenditures (heating and cooling) of low-income
households. However, under this new distribution rate no state may receive less
funding than it would have under the Tier 1 distribution rate as it was in effect for
FY1984 (and assuming a $1.975 billion appropriation). To ensure this “hold-
harmless” provision can be met, those states with the greatest increase in their
funding rate must have that percentage share of funds ratably reduced. The Tier II
distribution effectively ensures that, given the required increase in LIHEAP funding,
a state cannot receive less than a state-specific absolute dollar amount.
Tier III. For funding levels at or above $2.25 billion a Tier III rate is applied.
The Tier III rate uses the Tier II methodology to distribute funds but adds a second
hold-harmless requirement. States that would receive less than 1% of a $2.25 billion
appropriation must be allocated funds using the rate they would have experienced at
a hypothetical $2.14 billion appropriation (if this rate is greater than the calculated
rate at $2.25 billion). In both the Tier II and Tier III rates, a state will not be allocated
less funds than the state received under the Tier I distribution as it was in effect in
FY1984 (had the appropriation level been $1.975 billion). The Tier III distribution,
however, effectively ensures that (given the required increase in LIHEAP funding)
state LIHEAP programs must receive a state-specific minimum share (or rate) of the
total funding. (See Table 2 below.)
8 For more information on the formula and the percentage share of funds a state would
receive at various levels of funding, see CRS Report RS21605, Low-Income Home Energy
Assistance Program (LIHEAP): Estimated Allocation Rates, by Julie Whittaker.
9 Current law provides that when the newer formula is used a state cannot receive less
money than it would have received in FY1984 at a $1.975 billion funding level. Since this
language was enacted, Congress further provided that HHS could use regular LIHEAP funds
appropriations for Training and Technical Assistance (P.L. 99-425) and it also authorized
Leveraging Incentive Grants (P.L. 101-501) and the REACH option (P.L. 103-252) — both
of which it generally funds out of regular LIHEAP funds. These debits on the regular funds
account were not in place for FY1984. Because they affect the level of regular funds
available for state grant allotments by a little more than $25 million it is possible that HHS
would not implement the newer formula before a regular funds appropriation level reaches
just above $2 billion.
10 See immediately previous footnote.

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Table 2. Level of Funds Appropriated and Resulting
Distribution Factors for LIHEAP Regular Funds
Funds
Statutory directive
Data used
Hold Harmless
appropriated
Tier 1
P.L. 97-35 created
Heating degree days
Not applicable.
$1.975 billion
LIHEAP and
(squared), residential
or less
effectively directed
energy expenditures,
that funds be
home heating
distributed as they had
expenditures, and number
been in FY1981 for a
of low-income
predecessor energy
households. (NOTE:
assistance program.
These data are not
updated and remain fixed
at the values that were
current circa 1980.)
Tier 2
At this funding level,
Heating degree days,
States with greatest
more than
P.L. 98-558 amended
cooling degree days,
proportionate increase
$1.975 billion
the LIHEAP statute to
heating expenditures,
in their rate of funding
but less than
provide that state
cooling expenditures,
must have their share
$2.25 billion
allotments be
type of energy used, cost
of funding (or rate)
determined according
of energy, number of low-
reduced to ensure that
to “expenditures for
income households and
no state receives less
home energy by low-
the method of heating or
money than it would
income households”
cooling used by low-
have received for
and based on the
income households.
FY1984 (if the
“most recent
(NOTE: Data used are to
appropriation that year
satisfactory data”
be current.)
would have been
available to HHS.
$1.975 billion).
Tier 3
Same as for Tier 2
Same as for Tier 2.
Same as for Tier 2; in
$2.25 billion
addition, any state that
or more
would receive less
than 1% of a total
$2.25 billion
appropriation must be
allocated funds at the
rate it would have
received at a $2.14
billion appropriation
(if this rate is greater
than it would be at
$2.25 billion).
Source: Table prepared by the Congressional Research Service.

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Contingency funds. The statute currently provides an annual authorization
of $600 million for LIHEAP contingency funds. Appropriated contingency funds may
only be released at the discretion of HHS and may be allocated to one or more states
based on their needs. The statute authorizes appropriation of contingency funds “to
meet the additional home energy assistance needs of one or more States arising from
a natural disaster or other emergency.” The term “emergency” is defined in the
LIHEAP statute to include: a natural disaster; a significant home energy supply
shortage or disruption; significant increases in the cost of home energy, home energy
disconnections, participation in public benefit programs, or unemployment; or an
“event meeting such criteria as the [HHS] Secretary may determine to be
appropriate.”
Leveraging incentive and REACH funds. In 1990, P.L. 101-501,
amended the program statute to provide a separate funding authorization of $50
million ($30 million if regular funds appropriated are under $1.4 billion) for
incentive grants to states that leverage non-federal resources for their LIHEAP
programs. Such resources might include negotiated lower energy rates for low-
income households or separate state funds. States are awarded incentive funds in a
given fiscal year based on a formula that takes into account their previous fiscal year
success in securing non-federal resources for their energy assistance program. In
1994 (P.L. 103-252) the statute was further amended to provide that of any incentive
funds appropriated, up to 25% may be set aside for the Residential Energy Assistance
Challenge Option (REACH). Under the REACH option states may be awarded
competitive grants for their efforts to increase efficiency of energy usage among low-
income families and to reduce those families’ vulnerability to homelessness and other
health and safety risks due to high energy costs. Although the funding authorization
for Leveraging Incentive and REACH grants is separate, in practice, Congress has
funded these initiatives at $22 million to $30 million with dollars set-aside out of
annual regular fund appropriations.
Other funds. States are allowed to carry over unused funds from a previous
fiscal year (limited to 10% of funds awarded a state). A diminishing amount of
money may also be available from previously settled claims of price control violation
by oil companies.11 Finally states have the authority to transfer funds to LIHEAP
from certain other federal block grants (including TANF).
Table 3 (at the end of this report) shows a history of actual and proposed
LIHEAP appropriations for each of FY1982-FY2004.
Legislative history. Since it was created by the Low Income Home Energy
Assistance Act of 1981 (Title XXVI of P.L. 97-35), the LIHEAP program has been
reauthorized or amended six times. The legislation and some of the significant
changes made are briefly discussed in the following paragraph.
11 LIHEAP: Report to Congress, FY2001, pp. 10-11. For FY2001 $1.3 million in oil
overcharge funds was obligated by 1 state.

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In 1984, P.L. 98-558, established a new formula by which regular LIHEAP
funds are to be distributed in every year (after FY1985) in which regular
appropriations exceed $1.975 billion. (This level of funding was exceeded in FY1986
but has not been reached in any year since then.) In 1986, P.L. 99-425 extended the
program with few changes. In 1990, P.L. 101-501 created the Incentive Program for
Leveraging Non-Federal Resources and authorized a July to June program year (or
forward funding) for LIHEAP to allow state program directors to plan for the
fall/winter heating season with knowledge of available money. (This program year
language was subsequently removed although the statute now states that money
appropriated in a given fiscal year is to be made available for obligation in the
following fiscal year. Congress last provided advance appropriations for LIHEAP in
the FY2000 appropriations cycle.) In 1993, P.L. 103-43 extended the authorization
of LIHEAP for one year but made no other changes. In 1994 (P.L. 103-252) Congress
stipulated that LIHEAP benefits and outreach activities target households with the
greatest home energy needs (and costs), and it enacted a separate and permanent
contingency funding authorization of $600 million for each fiscal year. The 1994 law
also established the competitive REACH grant option. In 1998, P.L. 105-285
authorized annual regular funding for each of FY2002-FY2004 at $2 billion and
made explicit a wide variety of situations under which HHS is authorized to release
LIHEAP contingency funds.
Recent Developments
FY2004 funds appropriated and released. The final agreement on the
FY2004 omnibus spending measure made available $1.789 billion in regular
LIHEAP funds for this fiscal year and $99.4 million in contingency funds. The
agreement was signed into law on January 23, 2004 (P.L. 108-199) and sets the total
appropriated FY2004 funds (as of February 5, 2004) at $1.899 billion. For FY2003
Congress made available a total of $1.788 billion in regular funds (P.L. 108-7) and
an additional $200 million in previously appropriated contingency funds (P.L. 107-
20) were also released, which brought the total FY2003 program funds to $1.988
billion.
On February 5, 2004 HHS announced the release of $191.5 million in FY2004
LIHEAP funds of which $99.4 million were contingency funds and $92.1 million
regular funds. This brings to $1.642 billion the total amount of all FY2004 LIHEAP
funds that have been released.
Contingency funds. Of the FY2004 contingency funds released close to $40
million were distributed to all states based on the regular block grant formula
distribution. The remaining funds were distributed to states which experienced colder
than normal temperatures in January. The amount of funding to these states was
based on both the severity of the cold in the state and its relative share of regular
block grant funds. These funds went to 18 states (MA, CT, RI, VT, NY, NJ, PA, ME,
DE, MD, UT, AK, NH, OH, MI, VA, WV, ND) and the District of Columbia. All of
the recently appropriated FY2004 LIHEAP contingency funds have now been
distributed and as of February 5, 2004, no additional contingency funds are available
for release.

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Regular Funds. The February 5 release of LIHEAP funds also included $92.1
million in regular funds that became available because the final FY2004
appropriation was higher than had been assumed by HHS when it distributed first and
second quarter LIHEAP funds to states. Under the series of continuing funding
resolutions that funded federal government spending through much of the first four
months of FY2004, HHS had made regular first and second quarter awards to states
based on an assumed annual funding level of $1.689 billion. The final regular grant
funding level ($1.789 billion) exceeded this amount and thus the early February
release will give states their full first and second quarter allotments based on this
higher amount. Many states request the allotment of all or most of their LIHEAP
program funding in the first or second quarter of the fiscal year. Twelve states (AR,
GA, IL, KY, MN, MS, MT, NM, ND, RI, TX , WA) and the District of Columbia
requested their full FY2004 LIHEAP allotments in the first two quarters and an
additional 23 states had received 90%-98% of their FY2004 allotments at this
assumed funding level.12
President’s FY2005 Request. In his FY2005 budget, President Bush called
for a little more than $2 billion in total LIHEAP funding, of which $1.8 billion
would be for regular fund allotments, $200 million would be for contingency funds
and $500,000 would be set-aside for a national evaluation of LIHEAP. The
President’s budget documents include a program performance rating for selected
federal programs. LIHEAP is rated as a program for which “results [are] not
demonstrated.” According to this review, the program purpose is clear, it addresses
a specific existing need, and has a number of additional strengths including effective
targeting of intended beneficiaries. However, the review notes that the program’s
“effectiveness or efficiency” is hampered by the current law formula, it has limited
and only recently developed outcome measures, and there have been no independent
evaluations (of “sufficient scope and quality”) that demonstrate the program’s
effectiveness. The Administration is proposing that Congress make available
$500,000 to conduct a feasibility study regarding a nationally representative
evaluation of LIHEAP program operations.
Program authorization. LIHEAP authorization is scheduled to expire at the
end of FY2004. In October 2003 the HELP Committee ordered reported to the Senate
a bill (S. 1786) that would extend LIHEAP with an annual funding authorization of
$3.4 billion in each of FY2004-FY2006 and at such sums as necessary through
FY2010. S. 1786 would also make specific increases in energy costs, or extremes in
weather, an automatic trigger for release of contingency funds; extend authorization
of leveraging incentive grants and the Residential Energy Assistance Challenge
(REACH) option under LIHEAP and would require the GAO to evaluate the REACH
option; and, finally, it would require HHS to evaluate LIHEAP performance,
develop a protocol for states to collect certain consumer statistics from energy
12 A portion of the first quarter funds states requested was released on October 16 ($852
million) and the remaining first quarter funds requested were released ($273 million) on
December 19. Full second quarter requests were made available on January 1, 2004 ($325
million). A small portion of these total funds were released to tribes and territories.
Additional information and tables showing allocations by state may be viewed at
[http://www.ncat.org/liheap/news/Dec03/HHSfundingrelease.htm].

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CRS-11
distributors, study other specific factors relevant to the programs’s operation and to
report these finding to Congress within two years.
The House Education and Workforce Committee held a hearing on LIHEAP in
July but has not debated specific reauthorization language.13 However, on November
18, 2003 the full House voted to support the conference agreement reached on the
Energy Policy Act of 2003 (H.R. 6, H.Rept. 108-375). That agreement would raise
regular LIHEAP funding authorization to $3.4 billion in each of FY2004-FY2006
and would require HHS to prepare a report for Congress on how LIHEAP could more
effectively prevent loss of life from extreme temperatures. However, as of February
5, 2004, the Senate has not yet voted on this conference agreement and its fate in that
chamber remains unclear.
Current Issues
Congress has shown recent interest in adjusting the method by which
contingency funds are released, revisiting the formula used to distribute regular
LIHEAP funds, and in performance measurement.
Release of contingency funds. Contingency funds are appropriated by
Congress “to meet the additional home energy assistance needs of one or more States
arising from a natural disaster or other emergency.” Current law provides a broad
definition of such emergencies, but gives HHS (acting on behalf of the President)
sole discretion to determine when events warrant the release of contingency funds,
what states (or state) are to receive contingency funds, and under what formula this
money will be distributed.14 Depending on the language used in the appropriations
act, contingency funds that are not released by HHS in the fiscal year for which they
are appropriated may revert to the federal treasury at the end of the fiscal year
(expire), or they may remain available for a specified number of years or until
expended.
S. 1786, as reported by the Senate HELP committee would amend current law
to establish two conditions that would require HHS to release available contingency
funds to affected states. Those conditions would be: 1) if there is an increase of at
least 20% in the cost of home energy over the previous 5-year average for a duration
of a month or more in one or more states or regions; or 2) if one or more states
experience hot or cold weather that is significantly more severe than average (i.e. the
number of heating degree days or cooling days for a month is more than 100 above
the 30-year average).15 This proposal is in keeping with the committee’s reported
13 To view a printed record of this hearing select Hearing on LIHEAP & CSBG, July 8,
2003, at [http://edworkforce.house.gov/hearings/108th/edr/edrhearings.htm].
14 P.L. 105-285, which last reauthorized LIHEAP, defined the term “emergency” broadly
and added a “natural disaster” as a possible cause for the release of LIHEAP contingency
funds. In explaining these changes, S.Rept. 105-256 noted that the changes were intended
to clarify when contingency funds may be released and particularly to assert that
emergencies need not be temperature driven.
15 A heating degree day equals the number of degrees below 65°F in a given day. For
(continued...)

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CRS-12
concern that “emergency funds appropriated in FY2001 and FY2002 were not
distributed to States despite requests from Congress and Governors for the release of
funds.” The committee report also encourages HHS “to consider all factors defined
in the statute” when making decisions about release of contingency funds.16
Current law provides that “a significant increase in home energy
disconnections” may be considered an emergency that warrants release of
contingency funds. In keeping with its desire for HHS to “monitor arrearage trends
nationwide” and to consider a significant increase in energy utility arrearages as part
of this “disconnection criteria” for releasing contingency funds, the committee-
reported S. 1786 would also require HHS to develop a protocol for states to collect
information from energy vendors on a range of residential customer statistics. In
addition to overall statistics on the number of disconnections for nonpayment and the
number of reconnections, the protocol would need to establish a method for gathering
information specific to those accounts that are certified as eligible for energy
assistance. This information would include total number of energy assistance eligible
accounts, the number of those accounts that are past due, the number that have been
issued disconnection notices, the total past due amount owed, the number determined
uncollectible and the energy burden of these accounts. A description of the protocol
would need to be included in a larger report on LIHEAP that S. 1786 would require
HHS to complete and submit to Congress within two years of the legislation’s
enactment.
Echoing the HELP Committee report language, the conference report
accompanying the FY2004 omnibus spending measure (H.Rept. 108-401) notes that
arrearages are a precursor to energy utility disconnections and that an increase in such
disconnections is one criteria for the release of emergency funds. Like the HELP
committee, the conferees “urge” HHS to consider a significant increase in arrearage
rates as part of the disconnection criteria for releasing emergency funds. They also
“urge” HHS to make available “regular information on significant, unanticipated
changes in home heating and cooling costs” and “quarterly reports on significant
variances in regional weather data and fuel prices” to the LIHEAP-authorizing and
the appropriations committees and state that “such reports should be provided within
30 days of the end of any fiscal quarter in which LIHEAP contingency funds remain
available for obligation.” Finally, should funds be released, the conferees seek a
“detailed explanation of the factors used to determine the distribution of funds.” And
they also remind HHS that it is “expect[ed]” to “consider the factors identified in the
statute when making decisions about the release of funds,” and request that the House
15 (...continued)
example, if the average temperature on a given day is 55°F then the number of heating
degree days for that day is 10. A cooling degree day equals the number of degrees above
65°F in a given day. For example, if the average temperature for the day is 75°F then the
number of cooling degree days for that day is 10.
16 U.S. Congress, Senate Health, Education, Labor and Pensions Committee, Poverty
Reduction Act of 2003, report to accompany S. 1786, 108th Cong., 2nd Sess., S.Rept. 108-210,
p. 15.

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CRS-13
and Senate Appropriation Committees receive formal notification in advance of any
release of contingency funds.17
Recent contingency fund appropriations and releases. On February
5, 2004 HHS released all of the $99.4 million in contingency funds that were
appropriated for FY2004. (See discussion above, FY2004 Funds Released). There
are no additional LIHEAP contingency funds available for release.
The FY2003 funding act (P.L. 108-7) did not include an appropriation of
LIHEAP contingency funds. However in January 2003, HHS drew on unspent
contingency funds (initially appropriated in FY2001 by P.L. 107-20 and made
“available until expended”) to release $200 million. These funds were distributed to
all states and were intended to help defray increased home energy costs for heating.
Most of these funds ($120 million) were distributed using the regular distribution
formula. However, a portion ($80 million) was allotted using a slightly modified
formula that targeted the money to states with the largest number of low-income
households using oil as their primary heating fuel.18 For FY2003 Congress also re-
categorized (as regular LIHEAP funds) $100 million in previously appropriated (P.L.
107-20) but still available contingency funds. This money was distributed to all states
as part of the FY2003 allotment of regular LIHEAP funds.19
For FY2002, P.L. 107-116, provided $300 million in LIHEAP contingency
funds that were to remain available for that fiscal year alone. Out of this amount HHS
released $100 million in August 2002 to the 34 jurisdictions 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.20 The remaining $200 million in
appropriated but undistributed FY2002 contingency funds reverted to the federal
treasury at the end of the fiscal year. (For a list of contingency funds appropriated and
amounts distributed, by year, see Table 3, at the end of this report.)
LIHEAP formula. The conference agreement to the Energy Policy Act would
require HHS to report to Congress on how LIHEAP “could be used more effectively
to prevent loss of life from extreme temperatures”(H. Rpt 108-375, Section 1607).
This language was first included in House legislation and, according to the
accompanying committee report, would be intended to “assist the [HHS] Secretary
in developing a more accurate formula allocation methodology” to better meet the
17 Current law requires HHS to notify “Congress” and this notification is sent to the
LIHEAP authorizing committees, the House Education and Labor Committee and the Senate
Health Education, Labor and Pensions Committee.
18 The list of FY2003 contingency allotment amounts by state is available at
[http://www.hhs.gov/news/press/2003pres/20030124a.html].
19 The Senate in January 2003 approved an amendment to the FY2003 appropriations
legislation that would have re-categorized the entire $300 million in then available
contingency funds. Several days later the Administration released $200 million of these
unspent funds and the final legislation re-categorized the remaining $100 million. (See
S.Amdt. 27 to H.J.Res. 2 and P.L. 108-7.)
20 A list of FY2002 contingency allotments amounts by state is available at [http://www.acf.
dhhs.gov/programs/liheap/im02-17.htm].

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CRS-14
home energy assistance needs of “vulnerable populations.” Any formula developed,
the House committee notes, should use the best statistical data and model now
available, be a simple, easy-to-understand science based mechanism that considers
state-level expenditures for low-income home heating and cooling needs, and include
annually updated, state-level heating and cooling degree day and fuel price
information.21
The Senate has not yet agreed to vote on the conference agreement to the Energy
Policy Act. However, the Senate HELP committee has reported legislation to
reauthorize LIHEAP (S. 1786), which would also require HHS to report to Congress
on several issues that might be relevant to formula determinations. These include: an
analysis of the public health and safety threats of hypothermia and hyperthermia due
to lack of home heating or cooling, including morbidity, mortality and decrease in
caloric intake; an analysis of the affect of standard of housing and housing age on
energy costs to low-income households; and an evaluation of regional differences in
cost-of-living and the ability of low-income families to meet home energy
requirements.
Finally, the President’s FY2003 budget indicated 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
households.” However, neither his FY2004 or FY2005 budgets explicitly repeated
this interest. As noted earlier in this report, current law provides for this kind of
LIHEAP funds distribution but only after regular funds appropriations reach a
specific level. Because the regular funds appropriations have not (since FY1986)
been high enough to trigger the “new formula” included in current law, funds
continue to be distributed based on a static 1981 formula. (For more information see
Funds and Allocation above.)
Performance measurement. S. 1786 would require HHS to evaluate the
performance of LIHEAP with regard to who the program serves, the benefits of the
program to recipients, and the ability of the program to reduce utility arrearage and
shut-offs among low-income households. Findings of the evaluation would be part
of a required report due to Congress within two years of the legislation’s enactment.
S. 1786 would also would require the GAO to conduct a new evaluation of the
REACH option under LIHEAP.22 The President’s FY2005 budget requests funds
($500,000) for a national evaluation related to program performance. (See above,
FY2005 President’s Request).
Current law provides that federal LIHEAP funds should serve low-income
households that pay high home energy costs relative to their income and those that
include very young, disabled, or elderly individuals. HHS has recently developed
performance goals and measures to enable it to quantify state performance. For
21 U.S. Congress, House Energy and Commerce Committee, Energy Policy Act of 2003,
report to accompany H.R. 1644, 108th Congress, 1st sess., H.Rept. 108-65, Part 1, p. 145.
22 In 2001 the GAO released an earlier requested report on the REACH option. U.S. General
Accounting Office, Residential Energy Assistance: Effectiveness of Demonstration Program
as Yet Undetermined, GAO-01-723, Aug. 2001.

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CRS-15
FY2004 the performance goals are to increase the percentage of LIHEAP recipient
households that have a household member 5 years old or younger or a household
member at least 60 years old. Achievement of these goals will be measured using
newly developed benefit-targeting indexes and based on a FY2001-FY2002 baseline.
(FY2003 performance data are not yet available.) HHS initially intended to develop
a performance measure and goal concerning the targeting of LIHEAP benefits to
households with high energy burdens but has since dropped this measure due to data
concerns.23
23 See U.S. Department of Health and Human Serivces, Administration for Children and
Families FY 2004 Performance Report, pp. M-138-145.To view this report go to
[http://www.acf.hhs.gov/programs/opre/fy2004performance/fy2004finalplan-section4.pdf]

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CRS-16
Table 3. LIHEAP Funding Trends: FY1982-FY2005
($ 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
300,000
100,000d
2003
1,400,000
2,000,000
1,788,300e
0
200,000f
2004
1,700,000
2,000,000
1,789,380
99,410
99,410
2005
1,800,500g
Source: Table prepared by the Congressional Research Service (CRS) based on HHS data.
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 Sept. 2000
making it effectively available to states in FY2001.
d These funds were distributed out of a total of $300 million in contingency funds that were
appropriated in FY2002 (P.L. 107-116). With the end of FY2002, the remaining $200 million
of these FY2002 contingency funds expired.
e The final FY2003 appropriations act (P.L. 108-7) included $1.688 billion in new regular funds and
converted $100 million of the contingency funds, originally appropriated in FY2001 (P.L. 107-
20), into regular funds.
f These funds were distributed out of a total of $300 million in contingency dollars appropriated as part
of the FY2001 supplemental (P.L. 107-20). That law provided that the funds were “available
until expended.” Congress subsequently converted the remaining $100 million into regular
funds available (see tablenote e).
g Of this amount the President requests that $500,000 be set aside for a national evaluation.

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