Order Code RL33275
Low-Income Home Energy Assistance
Program (LIHEAP) Allocation Rates:
Legislative History and Current Law
Updated August 30, 2007
Libby Perl
Analyst in Housing
Domestic Social Policy Division

Low-Income Home Energy Assistance Program
(LIHEAP) Allocation Rates:
Legislative History and Current Law
Summary
The Low-Income Home Energy Assistance Program (LIHEAP) provides funds
to states so that they may help low-income households pay home energy expenses.
States may use LIHEAP funds to assist families with heating and cooling costs,
provide crisis assistance, and pay for weatherization projects. The LIHEAP statute
provides for two types of funding: regular block grant funds and emergency
contingency grants. All regular funds that Congress appropriates are allocated to the
states, the District of Columbia, U.S. territories and commonwealths, and Indian
tribal organizations, whereas contingency funds may be released to one or more states
at the discretion of the Secretary of the Department of Health and Human Services
(HHS) based on emergency need.
Regular LIHEAP funds are allocated to the states according to a formula that
has a long and complicated history. In 1980, Congress created the predecessor
program to LIHEAP, the Low-Income Energy Assistance Program (LIEAP), P.L. 96-
223. Because Congress was particularly concerned with the high costs of heating (as
opposed to cooling), funds under LIEAP were distributed according to a multi-step
formula that benefitted cold-weather states. Later in 1980, Congress further amended
the LIEAP formula in a continuing resolution, P.L. 96-369, but did nothing to change
the emphasis on heating expenditures in cold-weather states. Congress enacted
LIHEAP in 1981 (P.L. 97-35), replacing LIEAP, and 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 (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 all energy costs of low-income households alone (a
change from the focus on heating needs of all households). The effect of these
changes meant that funds would be shifted from cold-weather northeastern and
midwestern states to southern and western states. To prevent a dramatic shift of
funds, Congress added two “hold-harmless” provisions to the formula. The result of
these provisions is a current law, three-tiered 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 an FY1984 appropriation of
$1.975 billion. Above an appropriation of $1.975 billion, funds are allocated
according to Tier II of the formula, which includes a hold-harmless level to prevent
some 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. Until FY2006, when Congress appropriated $2.48 billion in regular
funds, total LIHEAP regular appropriations had not exceeded the equivalent of an
FY1984 appropriation of $1.975 billion since FY1986. This report will be updated
as legislative or program activities warrant.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LIHEAP: Regular and Contingency Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
History and Previous Methods for Distributing Regular Funds . . . . . . . . . . . . . . . 2
Predecessor Program: Low Income Energy Assistance Program (LIEAP) . . 2
Enactment of LIHEAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reauthorization: Formula Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LIHEAP: Introduction of a Hold-Harmless Level . . . . . . . . . . . . . . . . . . . . 5
LIHEAP: Introduction of a Hold-Harmless Rate . . . . . . . . . . . . . . . . . . . . . 6
Current Law Distribution: How Allotments of Regular LIHEAP
Funding Are Determined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Tier I: Below $1.975 Billion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tier II: From $1.975 Billion up to $2.25 Billion . . . . . . . . . . . . . . . . . . . . . 8
Tier III: At or Above $2.25 Billion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Further Depiction of How State Allotments Depend Upon
Appropriation Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Components of the New Formula Rates (Used in Tiers II and III) . . . . . . . . . . . 15
Other CRS Reports on LIHEAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appendix: Summary of Significant LIHEAP Rates and Triggers . . . . . . . . . . . 17
List of Figures
Figure 1. Estimated Low Income Home Energy Assistance Program
(LIHEAP) Allocations at Various Appropriation Levels for
Three Types of States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Tables
Table 1. Low Income Home Energy Assistance Program (LIHEAP),
Estimated State Allotments for Regular Block Grants . . . . . . . . . . . . . . . . 10
Table 2. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, FY2007 . . . . . . . . . . . . . . . . . 18

Low-Income Home Energy Assistance
Program (LIHEAP) Allocation Rates:
Legislative History and Current Law
Introduction
The Low-Income Home Energy Assistance Program (LIHEAP) is a block grant
program 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, LIHEAP has
been reauthorized and amended several times, most recently in 2005, when P.L. 109-
58 authorized annual regular LIHEAP funds at $5.1 billion per year from FY2005
through FY2007.
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 regular heating and cooling costs, receive crisis assistance,2 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 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 Department of
Health and Human Services (HHS) data show an estimated 5.3 million households
received winter heating/crisis assistance in FY2005.3
LIHEAP: Regular and Contingency Grants
The LIHEAP statute provides for two types of program funding: block grant
funds — also referred to as regular funds — and contingency grants. Regular funds
are allotted to states according to methods prescribed by the LIHEAP statute as
amended by the Human Services Reauthorization Act of 1984 (P.L. 98-558). The
allotment methods operate so that the way in which funds are allocated to states
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 Crisis assistance may include immediate funds to prevent utilities from being disconnected
in a household.
3 U.S. Department of Health and Human Services, Administration for Children and Families,
FY2005 LIHEAP Home Energy Notebook, May 2007, p. 28.

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depends on the amount of funds appropriated by Congress. For FY2007, Congress
appropriated $1.98 billion in LIHEAP regular funds.
Contingency funds may be released and allotted to one or more states at the
discretion of the President and the Secretary of HHS. 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.4 On August 29, 2007, the Department of
Health and Human Services announced that it would release $50 million in
contingency funds to twelve states because of severe heat. The funds that were
released were part of the FY2007 contingency fund appropriation of $181 million.
Approximately $131 million in FY2007 funds remain available until the end of the
fiscal year, at which point they expire. In addition, just under $21 million in FY2005
contingency funds remain available until expended.
The remainder of this report discusses only the history and methods of
distributing regular LIHEAP funds.
History and Previous Methods for
Distributing Regular Funds
Predecessor Program: Low Income Energy
Assistance Program (LIEAP)

The predecessor program to LIHEAP, the Low Income Energy Assistance
Program (LIEAP), was established as part of the Crude Oil Windfall Profits Tax Act
of 1980, P.L. 96-223. Like LIHEAP, the predecessor program allocated funds to
states so that they could assist low-income households in paying home energy costs,
primarily the costs of heating their homes. The program emerged as the result of
concern over substantial increases in home energy costs, especially home heating fuel
costs, during the late 1970s. In its report accompanying H.R. 3919, a bill that
contained an early version of LIEAP, the Senate Finance Committee explained its
emphasis on total heating expenditures writing that “[a]lthough all low-income
households have suffered from increased energy costs, a particular hardship has
fallen on those households in the very coldest parts of the country....”5 As a result of
Congress’s concern about high heating costs, P.L. 96-223 allocated funds to states
through a formula that emphasized heating needs, while placing less importance on
cooling needs. In fact, P.L. 96-223 allowed states to provide funds for cooling only
when households could demonstrate medical necessity.
Under LIEAP, states chose one of four alternative formulas to measure home
energy needs. Each formula contained different combinations of several factors:
4 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.
5 Report of the Senate Committee on Finance, S.Rept. 96-394, to accompany H.R. 3919,
November 1, 1979, p. 112.

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residential energy expenditures; heating degree days6 or heating degree days squared;
and the number of low-income households in the state.7 Because total energy
expenditures (rather than energy expenditures of low-income households only) and
heating degree days (rather than cooling degree days) are higher in cold-weather
states, all formulas effectively gave preference to the home energy needs of low-
income households in cold-weather states. Congress authorized LIEAP for one year,
FY1981, at $3 billion.
Before the formula in P.L. 96-223 could be used to allocate funds, however,
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 addition to appropriating funds, P.L. 96-369
amended the set of formulas for determining state allotments that was set out in the
Crude Oil Windfall Profits Tax Act. The continuing resolution referred to a House
report (H.Rept. 96-1244) where the specific formula components were laid out.
H.Rept. 96-1244 contained an alternative set of formulas to those in P.L. 96-223,
with two sets of calculations for estimating state allotments.8 The alternative formula
calculations did little to erode the defacto cold-weather states preference, however.
The first step in the alternative 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 alternative, half of the allocation was
based on the increase in home heating expenditures between 1978 and 1980, 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 alternative, one
quarter of the allocation was based on total residential energy expenditures in 1980,
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
6 Heating degree days and cooling degree days measure how daily temperatures relate to
requirements for heating and cooling. The concept is explained later in this paper, in the
section “Components of the New Formula Rates.”
7 The number of low-income households was based on the Bureau of Labor Statistics (BLS)
lower living standard income level. The BLS determined this 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.
8 Report of the House Committee on Appropriations, H.Rept. 96-1244, to accompany H.R.
7998, August 21, 1980, pp. 75-76.

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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. Although the alternative
formula 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 because
it put more weight on the size of a state’s low-income population, and provided for
a minimum benefit to states based on the number of recipient households,
unconditioned on their household heating expenditures. In addition, the inclusion of
the increase in home heating expenditures from 1978 to 1980 in H.Rept. 96-1244
benefitted northeastern states, where heating oil prices had increased substantially.
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, although it contained less restrictive federal
rules and gave states more flexibility in determining how to operate their LIHEAP
programs. Regarding the formula, the new law 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. The program was 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.
Reauthorization: Formula Discussions
When Congress began to consider reauthorizing LIHEAP in 1983, two aspects
of the formula were disputed. First, legislators recognized that the multi-step formula
benefitted cold-weather states relative to warm-weather states because it took account
of energy costs of all households, not just low-income households.9 On average, the
proportion of poor families in warm-weather states is higher than that in cold-weather
states. Therefore, a formula that considered the total home energy expenditures of
only low-income households would allocate proportionately more funds to warm-
weather states.
The second disputed aspect of the formula centered around 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.10 For example, the most recent data the formula used was the change in
the cost of energy between 1978 and 1980, or the cost of energy in 1980, depending
9 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.
10 Report of the Committee on Energy and Commerce (H.Rept. 98-139, Part 2), to
accompany H.R. 2439, May 15, 1984, p. 13.

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on the sub-formula one chose to apply. No aspect of the formula took account of
increased costs after 1980.11
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 for 27, primarily in the South, and the same allocation for one state.12 The
amendment was eventually dropped from H.R. 3520 in conference with the Senate.
LIHEAP: Introduction of a Hold-Harmless Level
Efforts to reauthorize LIHEAP had begun in April 1983, when Representative
Richard Ottinger (New York) introduced 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” [sic]. 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.13 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 the amount they would have received had the same amount been
11 Ibid., p. 4.
12 Congressional Record, 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%.
13 “The Low-Income Home Energy Assistance Program: An Analysis of the 1984
Reauthorization Issues,” Coalition of Northeastern Governors, April 1984, p. 9.

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appropriated in FY1984. If the annual appropriation exceeded $1.875 billion, states
would not receive 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.
LIHEAP: 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, 1984.14 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.
! 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
was 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 was 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.15 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 on October
30, 1984. Until FY2006, appropriations for regular LIHEAP funds had only exceeded
an equivalent FY1984 appropriation of $1.975 billion in 1985 and 1986; therefore,
from FY1987 through FY2005, states continued to receive the same percentage of
14 The final version of S. 2565 can be found in the Congressional Record, October 4, 1984,
p. S13393.
15 Congressional Record, October 4, 1984, pp. S13415-S13416.

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LIHEAP funds that they received under the program’s predecessor, LIEAP. In
FY2006, funds were distributed according to Tier III of the LIHEAP formula.
Current Law Distribution: How Allotments of
Regular LIHEAP Funding Are Determined
Current law as enacted in P.L. 98-558 provides for three different methods to
calculate each state’s allotment of regular LIHEAP funds. The set of factors used to
determine the percentage of total funds that each state receives is sometimes called
the “new” formula. The calculation method (which uses the new formula rates) for
state allotments depends upon the size of the appropriation for that fiscal year. It is
important to understand 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.16
(Table 2 in the Appendix lists both the “old” and “new” allotment percentages.)
There are several important implications of current law:
! For funding levels at or below the hypothetical FY1984 allotment,
states are guaranteed that their allotment rate is equivalent to what
it was under the old formula.
! For funding levels above the hypothetical FY1984 allotment, the
new formula will not allocate any state fewer funds than the state
would have received at the hypothetical FY1984 funding level of
$1.975 billion. However, some states may not receive any funds
above that level, despite substantial increases in appropriation levels.
! Due to the hold-harmless provisions, the proportion of total regular
funds each state receives at funding levels above $1.975 billion may
differ substantially from the proportion they would have received at
$1.975 billion.
! For funding levels above $2.25 billion, certain states are subject to
a hold-harmless rate. If a state would receive less than 1% of the
total regular fund allotment at a hypothetical appropriation of $2.25
billion, and the state’s allotment proportion at a $2.14 billion
appropriation is greater than it would be at $2.25 billion, then that
state will receive the $2.14 billion allotment proportion for all
appropriation levels at or above $2.25 billion.
! 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 prior to application of the hold-harmless
provisions. This is due to the hold-harmless provisions and ratable
reductions. Ratable reductions must be applied to some states’
allotments to ensure that other states do not fall below the hold-
harmless level or hold-harmless rate.
16 See U.S. Department of Health and Human Services, Low Income Home Energy
Assistance Program: Report to Congress for FY1987
, p. 133.

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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,17 states receive the same percentage of funds that they would have received
at that appropriation level (Section 2604(a)(2)(A)).18 Note that the appropriation
level that is equivalent to a hypothetical FY1984 appropriation of $1.975 billion has
changed since FY1984. In FY1984, with the exception of funds provided to the
territories, the entire LIHEAP block grant was distributed to the states. Since then,
two other funds have become part of the block grant 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 funds. Assuming that funds for leveraging incentive/REACH grants is $27.5
million and training and technical assistance is $300,000, then the equivalent of an
FY1984 appropriation of $1.975 billion is approximately $2.0028 billion.19
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). In Table 1, column (a) reports
the amount of funds that each state would have received in FY1984 had the regular
appropriation been $1.975 billion.
Tier II: From $1.975 Billion up to $2.25 Billion
If the regular LIHEAP appropriation exceeds $1.975 billion for the fiscal year,
all funds are to be distributed under a different methodology, including a new set of
rates that are subject to a hold-harmless level (Section 2604(a)(2)(A)(ii)). Under Tier
II calculations, a state’s allotment in the statute is required to reflect “the percentage
which expenditures for home energy by low-income households in that state bears
to such expenditures in all states...” (See “Components of the New Formula” below.)
However, the statute provides that no state can be allocated less LIHEAP funds than
the state would have received under the Tier I formula if the appropriation level in
1984 were equal to $1.975 billion. This provision is known as the hold-harmless
level. (As mentioned above, this currently corresponds to $2.0028 billion in
appropriations for regular LIHEAP funds.)
Implementing the hold-harmless level greatly changes the proportion of the total
allocation that most states receive with application of the new formula. This is
because the statute provides that the hold-harmless level must be achieved by
reducing the allocation of funds to those states with the greatest proportional gains.
17 In fact, the appropriation in 1984 was not $1.975 billion but the law refers to this
hypothetical amount in its hold-harmless provision. The actual FY1984 appropriation was
$2.075 billion.
18 All section citations refer to the Low-Income Home Energy Assistance Act (Title XXVI
of P.L. 97-35), as amended.
19 This amount is arrived at by adding $27.5 million and $300,000 to $1.975 billion.

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Column (b) in Table 1 reports the estimated allotment of funds that each state
receives when the regular appropriation is at $2.14 billion, whereas Column (c)
reports the estimated allotment of funds when the regular appropriation is just under
$2.25 billion ($2,249,999,999). The allocations in (b) and (c) are calculated using
the Tier II methodology previously described. (Table 2 in the Appendix lists
whether or not a state is subject to the hold-harmless level.)
Tier III: At or Above $2.25 Billion
The law stipulates additional requirements in the methods for distributing funds
when the appropriation is at or above $2.25 billion (Section 2604(a)(2)(B)). 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. (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.) This hold-harmless rate ensures a state specific share of the
total available funds. The allocations to the states with the greatest proportional
funding share increases are then ratably reduced again, using the methodology
described in the Tier II discussion, until there is no funding shortfall.
The application of the hold-harmless rate creates another layer of discontinuity
in the allocation rates. Column (d) in Table 1 reports 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. Column (e) reports the estimated allotment each
state would receive at an appropriation of $2.25 billion. Column (f) reports the
estimated allotment of funds that each state would receive when the regular
appropriation is at $3.0 billion. Column (g) reports the estimated allotment of funds
that each state would receive when the regular appropriation is at $4.0 billion.
Column (h) reports estimated allotment of funds that each state would receive when
the regular appropriation is at $5.1 billion (the amount authorized by P.L. 109-58).

CRS-10
Table 1. Low Income Home Energy Assistance Program (LIHEAP),
Estimated State Allotments for Regular Block Grants
($ in millions)
Tier I
Tier II
Tier III
Hypothetical
$1.975 Billion
Just under
in FY1984
$2.14 Billion
$2.25 Billion
$2.25 Billion
$2.5 Billion
$3.0 Billion
$4.0 Billion
$5.1 Billion
State
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Alabama
16.963
21.461
25.855
25.470
36.021
57.336
76.627
97.847
Alaska
10.828
10.828
10.828
11.392
12.673
15.236
20.363
26.002
Arizona
8.203
10.379
12.504
12.318
17.420
27.814
39.351
50.249
Arkansas
12.943
16.376
19.728
19.435
26.709
32.111
42.914
54.799
California
91.001
115.135
126.272
126.272
140.478
168.889
225.712
288.218
Colorado
31.729
31.729
31.729
31.729
31.729
37.986
50.766
64.825
Connecticut
41.392
41.392
41.392
41.392
42.753
51.400
68.694
87.717
Delaware
5.494
6.951
8.374
8.249
10.734
12.905
17.246
22.022
District of Columbia
6.428
6.518
6.857
6.857
7.629
9.171
12.257
15.652
Florida
26.840
33.958
40.910
40.301
56.997
91.004
134.996
175.001
Georgia
21.221
26.849
32.346
31.864
45.065
71.952
106.735
138.365
Hawaii
2.137
2.137
2.232
2.248
2.501
3.007
4.019
5.132
Idaho
12.376
12.376
12.376
13.021
14.486
17.416
23.275
29.721
Illinois
114.565
114.565
114.565
114.565
118.401
142.347
190.240
242.922
Indiana
51.872
51.872
51.872
51.872
54.540
65.571
87.632
111.899
Iowa
36.762
36.762
36.762
36.762
36.762
36.762
43.050
54.971
Kansas
16.883
21.360
24.526
24.526
27.285
32.803
43.840
55.980
Kentucky
26.994
34.153
37.463
37.463
41.677
50.107
66.965
85.509
Louisiana
17.342
21.941
26.433
26.039
36.826
50.579
67.597
86.316
Maine
26.815
26.815
26.815
26.815
26.815
26.815
28.625
36.551
Maryland
31.693
40.098
48.307
47.588
59.764
71.851
96.026
122.618

CRS-11
Tier I
Tier II
Tier III
Hypothetical
$1.975 Billion
Just under
in FY1984
$2.14 Billion
$2.25 Billion
$2.25 Billion
$2.5 Billion
$3.0 Billion
$4.0 Billion
$5.1 Billion
State
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Massachusetts
82.797
82.797
82.797
82.797
82.797
90.332
120.724
154.156
Michigan
108.770
108.770
108.770
108.770
114.820
138.042
184.486
235.575
Minnesota
78.363
78.363
78.363
78.363
78.363
78.363
78.363
90.633
Mississippi
14.543
18.400
22.167
21.837
27.293
32.813
43.853
55.996
Missouri
45.762
52.663
55.406
55.406
61.639
74.105
99.038
126.464
Montana
14.517
14.517
14.517
15.273
16.991
20.428
27.300
34.861
Nebraska
18.180
18.180
18.180
19.127
21.279
25.583
34.190
43.658
Nevada
3.853
4.875
5.873
5.785
8.182
13.064
19.379
25.121
New Hampshire
15.672
15.672
15.672
16.488
18.343
22.053
29.472
37.634
New Jersey
76.865
76.865
76.865
76.865
76.865
84.225
112.563
143.734
New Mexico
10.270
12.994
13.934
13.934
15.501
18.636
24.906
31.804
New York
250.974
250.974
250.974
250.974
250.974
252.031
336.827
430.102
North Carolina
37.403
47.322
57.009
56.161
78.646
94.552
126.364
161.357
North Dakota
15.770
15.770
15.770
16.591
18.457
22.190
29.656
37.869
Ohio
101.350
101.350
101.350
101.350
111.388
133.916
178.972
228.534
Oklahoma
15.592
19.728
23.766
23.412
33.111
43.105
57.607
73.560
Oregon
24.591
24.591
24.591
24.591
24.879
29.911
39.974
51.044
Pennsylvania
134.810
134.810
134.810
134.810
134.810
153.563
205.229
262.062
Rhode Island
13.629
13.629
13.629
14.339
15.952
19.178
25.631
32.728
South Carolina
13.472
17.045
20.534
20.228
28.608
42.282
56.508
72.157
South Dakota
12.808
12.808
12.808
13.475
14.991
18.023
24.086
30.756
Tennessee
27.344
34.596
41.678
41.058
50.724
60.983
81.501
104.071
Texas
44.653
56.496
68.061
67.047
94.823
151.400
224.589
291.143
Utah
14.745
14.745
14.745
15.513
17.258
20.748
27.729
35.407
Vermont
11.747
11.747
11.747
12.358
13.749
16.529
22.091
28.208
Virginia
38.606
48.844
58.843
57.967
69.555
83.622
111.757
142.705

CRS-12
Tier I
Tier II
Tier III
Hypothetical
$1.975 Billion
Just under
in FY1984
$2.14 Billion
$2.25 Billion
$2.25 Billion
$2.5 Billion
$3.0 Billion
$4.0 Billion
$5.1 Billion
State
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Washington
40.450
40.450
40.450
40.450
40.450
48.109
64.295
82.100
West Virginia
17.864
20.242
21.296
21.296
23.692
28.483
38.066
48.608
Wisconsin
70.538
70.538
70.538
70.538
70.538
70.538
83.632
106.792
Wyoming
5.903
5.903
5.903
6.211
6.910
8.307
11.102
14.176
Total
1,972.33
2,109.339
2,219.191
2,219.191
2,468.852
2,968.175
3,966.821
5,065.331
Source: Congressional Research Service (CRS) calculations based on factors provided by the Department of Health and Human Services (HHS) in May 2007.
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,
$27.5 million to leveraging incentive and REACH grants, and $300,000 to training and technical assistance.

CRS-13
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. 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 in the previous section. the figure
also graphs the three basic types of states. Reading from top to bottom of Figure 1,
these three types of states are
! Hold-harmless level only states. These states are subject to only
the hold-harmless 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 2 (located in the Appendix), 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. The ratable reduction is (somewhat) evident by
the curvilinear appearance of line segments BD and DH. There is a
small non-linear decrease at point D. This is attributable to the
increased shortfall on the distribution of funds that the hold-harmless
rate imposes. In Table 2, 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)
non-linear 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
2
, 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-14
Figure 1. Estimated Low Income Home Energy Assistance Program (LIHEAP) Allocations at Various
Appropriation Levels for Three Types of States
$120
Tier II hold-harmless
Tier I
level
G
Tier III hold-harmless rate
$100
H
Hold-harmless level
only state
$80
t
A
F
n
e

ns)
tm
io
llo
ill
$60
m
e A
n
Ratably reduced
i
tat
state
Hold-harmless level
($
S
and rate state
$40
I
D
$20
B
E
C
$0
$0
$1,000
$2,000
$3,000
$4,000
$5,000
Appropriation
($ in millions)
Source: Figure created by Congressional Research Service (CRS) calculations using allotment rates provided by the Department of
Health and Human Services in May 2007.

CRS-15
Components of the New Formula Rates
(Used in Tiers II and III)
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 was not the most current
data available.20 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.
Current law requires HHS to “determine the expenditure for home energy by
low-income households on the basis of the most recent satisfactory data available.”
Developed by HHS, this formula accounts for variations in heating and cooling needs
of the states, the types of energy used, energy prices, and the low-income population
and their heating and cooling methods.
The new formula is a complex aggregation of state-level data, which attempts
to capture the expenditures of low-income households on heating and cooling for the
most current year possible. Variables used include the following:
! Average Annual Heating and Cooling Degree Days by State. 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. This
information is collected by the National Oceanic and Atmospheric
Administration. For example, a day with an average temperature of
40°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. A state’s heating and cooling degree data are weighted
by population in the state. Averages over 30 years also are measured
and are taken into account by the formula. The data from 2005 are
used to represent current climatic conditions that would cause an
increase or decrease in energy needs.
! Residential Sector Energy Price Projections by Fuel Type in
Nominal Dollars. These projected prices for fuels include coal, fuel
oil, natural gas, kerosene, liquefied petroleum gas, and electricity.
Regional energy price variation can be significant, and the formula
takes expected expenditure differences into account. This
information is collected by the Department of Energy’s Energy
Information Administration (EIA) and published in the State Energy
20 Report of the Committee on Energy and Commerce (H.Rept. 98-139, Part 2), to
accompany H.R. 2439, May 15, 1984, p. 13.

CRS-16
Data System Consumption, Price, and Expenditure Estimates.21 The
price data are from 2002 and are used to calculate current home
energy expenditures.
! Total Residential Energy Consumption by Fuel Source by State.
Residential energy consumption consists of the total Btus (British
Thermal Units) used in private households, generally encompassing
space and water heating, cooling, lighting, refrigeration, cooking,
and the energy needed to operate appliances. Estimates are provided
for coal, natural gas, fuel oil, kerosene, liquified petroleum gas, and
electricity. The data come from the 2002 EIA State Energy Data
System Consumption, Price, and Expenditure Estimates.
! The Percentage of Each Fuel Source Used for Heating and Cooling
by State. These data represent the percentage of Btus in a state that
are used for heating and the percentage used for cooling. This
information is used to calculate heating and cooling consumption by
low-income households and comes from the 2001 Residential
Energy Consumption Survey, adjusted for 2003.
! The Number of Low-Income Households by Fuel Source. The
Bureau of the Census, Department of Commerce, prepares a special
sample for the Department of Health and Human Services of the fuel
sources used by low-income households. The most recent
information comes from the 2000 Census. Low-income households
are those whose income is the greater of 150% of poverty or 60% of
state median income.
Although the underlying formula factors today are frequently revised as new
information becomes available, many components that comprise the current law
formula factors are as out-of-date as the factors used in the old formula were in 1983
when there was a push to incorporate newer (price) information. The most recent
formula factors were provided to CRS by the Department of Health and Human
Services in May 2007.
Other CRS Reports on LIHEAP
CRS Report RL31865, The Low-Income Home Energy Assistance Program
(LIHEAP): Program and Funding, by Libby Perl.
CRS Report RS21605, Low-Income Home Energy Assistance Program (LIHEAP):
Estimated Allocations, by Libby Perl.
21 The EIA’s state data tables are available at [http://www.eia.doe.gov/emeu/states/
_seds.html].

CRS-17
Appendix: Summary of Significant
LIHEAP Rates and Triggers
Table 2 presents a summary of significant LIHEAP rates and triggers for each
state. Column (a) lists the “old” formula factor percentages that states receive when
the appropriation level is below the hypothetical FY1984 appropriation. Column (b)
lists the “new” formula factor percentages that were provided by the Department of
Health and Human Services in May 2007. As mentioned earlier in this report,
current law requires that these “new” percentages be applied to state allotments,
regardless of the appropriation level. However, because of the hold-harmless
provisions, some (if not all) states do not actually end up with a state allotment that
mirrors this percentage.
Column (c) demarcates whether a state, given current law, would be subject to
the hold-harmless level provision (marked with a “Y”). These are states that have
a “new” percentage rate that is lower than their “old” percentage rate. Column (d)
lists the dollar value of the hold-harmless level for those states (dollars are reported
in millions). Column (e) lists whether a state would be subject to the hold-harmless
rate provision (labeled “Y”). These are states that would have received less than 1%
of a total $2.25 billion appropriation and are then allocated the percentage they would
have received at a $2.14 billion appropriation level. (This assumes the new
percentage is greater than the percentage originally calculated at the actual, $2.25
billion or greater, appropriation.) Column (f) lists the rate that would be used for
those “hold-harmless rate” states for appropriation levels at or above $2.25 billion.

CRS-18
Table 2. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, FY2007
Hold-Harmless Level
Hold-Harmless Rate
Subject to
Hold-
Subject to
“Old”
“New”
Hold-
Harmless
Hold-
Hold-
Allotment Allotment
Harmless
Level
Harmless
Harmless
Rate (%)
Rate (%)
Level?
($Millions)
Rate?
Rate (%)
State
(a)
(b)
(c)
(d)
(e)
(f)
Alabama
0.86%
1.93
N

N

Alaska
0.55
0.38
Y
10.828
Y
0.51
Arizona
0.42
0.99
N

N

Arkansas
0.66
1.08
N

N

California
4.61
5.69
N

N

Colorado
1.61
1.28
Y
31.729
N

Connecticut
2.10
1.73
Y
41.392
N

Delaware
0.28
0.43
N

N

District of Columbia
0.33
0.31
Y
6.428
N

Florida
1.36
4.19
N

N

Georgia
1.08
2.83
N

N

Hawaii
0.11
0.10
Y
2.137
Y
0.10
Idaho
0.63
0.39
Y
12.376
Y
0.59
Illinois
5.81
4.80
Y
114.565
N

Indiana
2.63
2.21
Y
51.872
N

Iowa
1.86
1.09
Y
36.762
N

Kansas
0.86
1.11
N

N

Kentucky
1.37
1.69
N

N

Louisiana
0.88
1.70
N

N

Maine
1.36
0.72
Y
26.815
N

Maryland
1.61
2.42
N

N

Massachusetts
4.20
3.04
Y
82.797
N

Michigan
5.51
4.65
Y
108.770
N

Minnesota
3.97
1.79
Y
78.363
N

Mississippi
0.74
1.11
N

N

Missouri
2.32
2.50
N

N

Montana
0.74
0.41
Y
14.517
Y
0.69
Nebraska
0.92
0.60
Y
18.180
Y
0.86
Nevada
0.20
0.69
N

N

New Hampshire
0.79
0.45
Y
15.672
Y
0.74
New Jersey
3.90
2.84
Y
76.865
N

New Mexico
0.52
0.63
N

N

New York
12.72
8.49
Y
250.974
N

North Carolina
1.90
3.19
N

N

North Dakota
0.80
0.24
Y
15.770
Y
0.75
Ohio
5.14
4.51
Y
101.350
N

Oklahoma
0.79
1.45
N

N

Oregon
1.25
1.01
Y
24.591
N

Pennsylvania
6.84
5.17
Y
134.810
N

Rhode Island
0.69
0.60
Y
13.629
Y
0.65
South Carolina
0.68
1.42
N

N

South Dakota
0.65
0.27
Y
12.808
Y
0.61

CRS-19
Hold-Harmless Level
Hold-Harmless Rate
Subject to
Hold-
Subject to
“Old”
“New”
Hold-
Harmless
Hold-
Hold-
Allotment Allotment
Harmless
Level
Harmless
Harmless
Rate (%)
Rate (%)
Level?
($Millions)
Rate?
Rate (%)
State
(a)
(b)
(c)
(d)
(e)
(f)
Tennessee
1.39
2.05
N

N

Texas
2.26
7.10
N

N

Utah
0.75
0.65
Y
14.745
Y
0.70
Vermont
0.60
0.36
Y
11.747
Y
0.56
Virginia
1.96
2.82
N

N

Washington
2.05
1.62
Y
40.450
N

West Virginia
0.91
0.96
N

N

Wisconsin
3.58
2.11
Y
70.538
N

Wyoming
0.30
0.23
Y
5.903
Y
0.28
Source: Congressional Research Service (CRS) calculations based on factors provided by the
Department of Health and Human Services (HHS) in May 2007.
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 the budgetary shortfall from the hold-harmless
provisions.