Older Americans Act: Funding Formulas

Contents

• Background
• Older Americans Act Reauthorization
• Title III: Grants for State and Community Programs on Aging
• Legislative History
• The OAA Amendments of 2000 and 2006
• Allocation for Supportive Services and Centers, Congregate and Home-Delivered Nutrition Services, and Disease Prevention and Health Promotion
• Analysis of OAA 2006 Amendments Funding Formula
• Allocation for Nutrition Services Incentive Program
• Allocation for the National Family Caregiver Support Program
• Title V: Community Service Employment for Older Americans
• Title VI: Grants for Older Native Americans
• Title VII: Vulnerable Elder Rights Protection Activities

Summary

The Older Americans Act (OAA) is the major vehicle for the delivery of social and nutrition services for older persons. The act's statutory funding formulas determine allotments to states and other entities under the following OAA Titles: Title III, Grants for State and Community Programs; Title V, the Community Service Senior Opportunities Act; Title VI, Grants for Older Native Americans; and Title VII, Vulnerable Elder Rights Protection Activities.

Title III accounts for 71% of the act's total FY2016 discretionary appropriations ($1.353 billion out of $1.915 billion). States receive separate allotments of funds for the following six programs authorized under Title III: (1) supportive services and centers, (2) congregate nutrition services, (3) home-delivered nutrition services, (4) the Nutrition Services Incentive Program (NSIP), (5) disease prevention and health promotion services, and (6) the National Family Caregiver Support Program (NFCSP). Formula grants are allotted from the Administration on Aging (AOA), within the Administration for Community Living (ACL) in the Department of Health and Human Services (HHS), to State Units on Aging (SUAs) in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories. The states, in turn, award funds to approximately 618 Area Agencies on Aging (AAAs).

Title V authorizes the Community Service Employment for Older Americans Program (CSEOA). Administered by the Department of Labor (DOL), Title V is OAA's second-largest program and is the only federally subsidized employment program for low-income older persons. Its FY2016 funding of $434.4 million represents 23% of the act's total discretionary funding. DOL allocates Title V funds for grants to state agencies in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories, and to national organizations. The total Title V state allotment is the sum of its respective state agency grantee allotment and national organization grantee allotment.

Title VI authorizes funds for supportive and nutrition services to older Native Americans to promote the delivery of home and community-based supportive services, nutrition services, and family caregiver support. Funds are awarded directly to Indian tribal organizations, Alaskan Native organizations, and non-profit groups representing Native Hawaiians.

Title VII authorizes the Long-Term Care (LTC) Ombudsman Program and elder abuse, neglect, and exploitation prevention programs. Most Title VII funding is directed at the LTC Ombudsman Program, the purpose of which is to investigate and resolve complaints of residents of nursing facilities and other long-term care facilities. Funds for LTC ombudsman and elder abuse prevention activities are allotted to states.

On April 19, 2016, President Barack Obama signed P.L. 114-144 (S. 192), the Older Americans Act Reauthorization Act of 2016. P.L. 114-144 authorizes appropriations for OAA programs through FY2019, among other changes to the act, including changes to most statutory funding formulas under Title III. Prior to the 2016 OAA reauthorization, the OAA Amendments of 2006 (P.L. 109-365) reauthorized all programs under the act through FY2011. Although the authorizations of appropriations under the OAA expired at the end of FY2011, Congress has continued to appropriate funding for OAA-authorized activities through FY2016.

This report describes the changes to the Title III funding formula under the Older Americans Act Reauthorization Act of 2016 (P.L. 114-144) as well as the OAA reauthorizations of 2000 and 2006. It then summarizes the OAA statutory provisions that allocate funds to states and other entities under other titles of the act.

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Older Americans Act: Funding Formulas

Background

First enacted in 1965, the Older Americans Act (OAA, P.L. 89-73, as amended) is the primary federal vehicle for the delivery of social and nutrition services for older persons. The majority of OAA grant funds are provided to states and other entities based on statutory formulas that exist in the following titles:

• Title III, Grants for State and Community Programs on Aging;
• Title V, Community Service Employment for Older Americans;
• Title VI, Grants for Older Native Americans; and
• Title VII, Vulnerable Elder Rights Protection Activities.

These formula grants fund programs that assist older Americans with supportive services; congregate nutrition services (meals served at group sites such as senior centers, community centers, schools, churches, or senior housing complexes); home-delivered nutrition services; family caregiver support; community service employment; the long-term care ombudsman program; and services to prevent the abuse, neglect, and exploitation of older persons. The OAA also supports grants to older Native Americans.^1,2

Since enactment of OAA, Congress has reauthorized and amended the act numerous times. In the 114^th Congress, bipartisan legislation to reauthorize the Older Americans Act has seen action in both the House and Senate. On April 19, 2016, President Barack Obama signed P.L. 114-144 (S. 192), the Older Americans Act Reauthorization Act of 2016. P.L. 114-144 authorizes appropriations for OAA programs for FY2017 through FY2019, among other changes to the act, including changes to most statutory funding formulas under Title III. Prior to the 2016 OAA reauthorization, the OAA Amendments of 2006 (P.L. 109-365) reauthorized all programs under the act through FY2011. Although the authorizations of appropriations under the OAA expired at the end of FY2011, Congress has continued to appropriate funding for OAA-authorized activities through FY2016.

This report describes the OAA statutory provisions that allocate funds to states and other entities for FY2016 by title. Appendix A provides further information about OAA Title III funding formulas for FY2016 under Parts B, C, and D; Appendix B analyzes the Title III funding formula changes under P.L. 114-144.

Older Americans Act Reauthorization

In the 113^th Congress, comprehensive OAA reauthorization legislation was introduced in the Senate (S. 1028 and S. 1562) which would have extended through FY2018 the authorizations of appropriations for most OAA programs and would have made various amendments to existing OAA authorities. The Older Americans Act Amendments of 2013 (S. 1028) was first introduced by Senator Sanders. It was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee's Subcommittee on Primary Health and Aging. Subsequently, Senator Sanders introduced a separate bipartisan reauthorization bill, S. 1562, the Older Americans Act Reauthorization Act of 2013, which was also originally co-sponsored by Senators Harkin and Alexander. The Senate HELP Committee ordered S. 1562 reported favorably with an amendment in the nature of a substitute. In the House of Representatives, two OAA reauthorization bills were introduced (H.R. 3850 and H.R. 4122). These bills were referred to the Committee on Education and the Workforce, but saw no further legislative action.

S. 1562 did not contain provisions that would amend OAA statutory funding formulas. However, during the Senate HELP Committee consideration of the OAA reauthorization bill Senator Burr introduced an amendment that would have removed the Title III Part B (supportive services and centers), Part C (nutrition services), and Part D (disease prevention and health promotion services) FY2006 hold harmless provision which was rejected. Senator Harkin stated there would be additional examination of the OAA funding formula by a Senate bipartisan workgroup with a possible solution prior to Senate floor consideration. The bill was subsequently reported out of committee and placed on the Senate Legislative Calendar, but did not receive consideration by the Senate.

In the 114th Congress, the Older Americans Act Reauthorization Act of 2015 (S. 192) was introduced January 20, 2015. The bill authorized appropriations for most OAA programs for a three-year period from FY2016 to FY2018. It also made various amendments to existing OAA authorities, including changes to the statutory funding formula for supportive services and centers, congregate nutrition, home-delivered nutrition, and disease prevention and health promotion services under Title III of the act that reduces the effect of the hold harmless provision over time. On January 28, 2015, the Senate HELP Committee ordered S. 192 reported favorably. It then passed the Senate on July 16, 2015. The House took up S. 192 on March 21, 2016 and passed the bill with an amendment authorizing appropriations for the three-year period from FY2017 to FY2019. S. 192, as amended by the House, did not substantively change the hold harmless reduction under S. 192, as passed by the Senate. Rather it amended the effective dates for the hold harmless reduction, from FY2016 through FY2018 to FY2017 through FY2019. It freezes this reduction in place for FY2020 and future fiscal years, unless or until such language is amended. The Senate passed S. 192 as amended by the House on April 7, 2016. President Barack Obama signed P.L. 114-144, the Older Americans Act Reauthorization Act of 2016 on April 19, 2016.

Prior to legislative consideration, the topic of OAA statutory funding formulas was also examined by GAO in an analysis of the OAA Title III and VII statutory funding formulas that focused on formula modifications that would capture state differences with respect to need by including factors that measure the needs of the elderly population, costs of services in addressing those needs, and the capacity of states to finance needed services.³ GAO found that the current formulas could better meet generally accepted equity standards in targeting OAA services to those with "greatest economic need" and "greatest social need." For example, GAO found that the need for OAA services can be better estimated using data on older individuals' functional limitations. GAO also noted that while revisions to the OAA statutory formula may pose challenges, options to ease the transition such as phasing in implementation over several years and/or instituting funding floors or ceilings may be further provisions for policymakers to consider in any statutory revisions.

Title III: Grants for State and Community Programs on Aging

Title III authorizes grants to State Units on Aging (SUAs) and Area Agencies on Aging (AAAs) in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories to act as advocates on behalf of, and to coordinate programs for, older persons (defined in the law as those aged 60 and older). The Administration on Aging (AOA) within the Administration for Community Living (ACL) in the Department of Health and Human Services (HHS), allocates Title III funds to SUAs. The states, in turn, award funds to more than 600 AAAs, which are designated by states to operate within specified planning and service areas. States must develop an intrastate funding formula for distribution of Title III funding within the state that takes into account the geographical distribution of older individuals in the state as well as the distribution of older individuals with greatest economic and social need (with particular attention to low-income minority older individuals) among specified planning and service areas. The state formula for distribution of Title III funding must be developed in accordance with AOA guidelines and approved by the Assistant Secretary for Aging.

As the OAA's largest component, discretionary spending under Title III accounts for 71% of the act's total FY2016 appropriations ($1.353 billion out of $1.915 billion).⁴ States receive separate allotments of funds for the following six programs authorized under Title III: (1) supportive services and centers, (2) congregate nutrition services, (3) home-delivered nutrition services, (4) the Nutrition Services Incentive Program (NSIP), (5) disease prevention and health promotion services, and (6) the National Family Caregiver Support Program (NFCSP). States are required to provide a matching share of 15% in order to receive funds for supportive services and congregate and home-delivered nutrition programs. A matching share of 25% is required for the NFCSP; no match is required for disease prevention and health promotion services. To determine state allotments, a separate allocation is calculated for each of the six grant programs. The same formula is used to determine state allocations for supportive services and centers, congregate nutrition services, home-delivered nutrition services, and disease prevention and health promotion services. The formulas for the NSIP and NFCSP use different factors. This section describes the debate surrounding changes to the Title III funding formula during the OAA reauthorizations of 2000 and 2006, followed by a brief description of the different Title III allocation formulas under the 2006 OAA Amendments (P.L. 109-365), which applies to FY2016 allotments.

Legislative History

When the OAA was enacted in 1965, Title III funds were allocated to states based on their relative share of the population aged 65 and over.⁵ The law also set certain minimum grant amounts for states and territories. For states, the minimum allotment was 1% of total funds appropriated, and for the U.S. Virgin Islands, Guam, and American Samoa, the minimum allotment was 0.5% (one-half of 1%) of funds appropriated. These provisions remained in effect until 1973.

The first significant change to the OAA Title III funding formula occurred in 1973. The 1973 amendments to the act based the formula on the states' relative share of the population aged 60 and over, rather than as under prior law, aged 65 and over.⁶ The 1973 amendments also changed the minimum allotments states and territories were to receive, as follows: states were to receive no less than 0.5% of the total appropriation; and Guam, American Samoa, the U.S. Virgin Islands, and the Trust Territories of the Pacific Islands⁷ were to receive no less than 0.25% (one-fourth of 1%) of total funds. In addition, the 1973 amendments specified that states were to receive no less than they received in FY1973 (the hold harmless amount).⁸

These provisions remained in effect until the 1978 amendments, which changed the minimum amounts for American Samoa to one-sixteenth of 1% of the appropriation, and added a minimum funding amount for the Northern Marianas (also one-sixteenth of 1%).⁹ These amendments also changed the year for the hold harmless amount. The law stipulated that for fiscal years after 1978, states were to receive no less than they received in FY1978, rather than as in prior law, FY1973. Successive amendments subsequently changed the hold harmless year. Amendments in 1984 required that for fiscal years after FY1984, states be allotted no less than they received for services in FY1984.¹⁰ The 1987 amendments made no change in the formula provisions.¹¹ The 1992 amendments moved the hold harmless reference year to FY1987.¹² No further changes were made to these funding formulas until the 2000 amendments.

The OAA Amendments of 2000 and 2006

The Title III funding formula for supportive services and centers, the congregate and home-delivered nutrition programs, and disease prevention and health promotion services has been a point of controversy in recent congressional attempts to reauthorize the Older Americans Act. Initially, Congress was concerned that the method AOA used to distribute Title III funds was inconsistent with statutory requirements thereby negatively affecting states experiencing faster growth in their older population. However, more recently, congressional debate has focused on whether or not the statutory formula itself accurately reflects trends in the aging of the U.S. population. The following provides a brief overview of the debate and legislative changes to the Title III funding formula in the OAA reauthorizations of 2000 and 2006.

After unsuccessful attempts to reauthorize the OAA by the 104^th and 105^th Congresses, the 106^th Congress approved the Older Americans Act Amendments of 2000 (P.L. 106-501). The Title III funding formula was a controversial issue during the six years of congressional debate on the 2000 OAA reauthorization.¹³ Prior to the reauthorization, a 1994 U.S. General Accounting Office (now the Government Accountability Office, or GAO) report found that the method AOA used did not distribute funds among states proportionately to their older population to the maximum extent possible.¹⁴ Instead, AOA allotted funds to states, first according to an amount equal to their FY1987 "hold harmless" allocation, with the remainder of the appropriations allotted to states based on their relative share of the population aged 60 and over. This methodology negatively affected states with faster-growing older populations, since the majority of funds were being distributed according to population estimates that did not reflect the most recent trends. The GAO report recommended that AOA revise its methodology for distributing funds to states.

In response to these concerns, the 2000 OAA reauthorization resulted in the following changes to the law: (1) Congress clarified the law to ensure that, first, funds were allotted to states based on the most recent population data; (2) Congress created an FY2000 "hold harmless" requirement, thereby ensuring that no state would receive less than it received in FY2000; and (3) Congress created the "guaranteed growth" provision, ensuring that all states would receive a share of any appropriations increase over the FY2000 level.

The Title III funding formula also became a major point of contention during the 2006 OAA reauthorization debate.¹⁵ Congress revisited the FY2000 "hold harmless" requirement and "guaranteed growth" provision. At the time, the "hold harmless" requirement ensured that, provided sufficient funds, every state and U.S. territory received at least its FY2000 amount. The "guaranteed growth" provision guaranteed that all states received a certain share of any increase above the FY2000 appropriation. These issues divided Members from states with relatively faster-growing older populations from lawmakers representing states with relatively slower growth in their older populations. High-growth states argued that the "hold harmless" provisions in current law provided protections to states whose populations were not increasing as quickly as others', resulting in an inequitable distribution of funds that disadvantages high-growth states.

The OAA 2006 Amendments ultimately resulted in changes to the law as follows: (1) Congress changed the formula to ensure that, provided sufficient funds, every state receives at least its FY2006 amount (creating a new fiscal year "hold harmless" amount); and (2) Congress phased out the "guaranteed growth" provision, reducing the share of any increase in appropriations from 20% to 0 by 5 percentage points annually beginning in FY2008. For FY2007 through FY2010, the guaranteed growth provisions were as follows:

• 20% of the percentage increase in appropriations from FY2006 to FY2007;
• 15% of the percentage increase in appropriations from FY2006 to FY2008;
• 10% of the percentage increase in appropriations from FY2006 to FY2009; and
• 5% of the percentage increase in appropriations from FY2006 to FY2010.

Under current law, for FY2011 and any succeeding fiscal years, the formula does not include the guaranteed growth provision.

Allocation for Supportive Services and Centers, Congregate and Home-Delivered Nutrition Services, and Disease Prevention and Health Promotion

Separate state allotments for (1) supportive services and centers, (2) congregate nutrition services, (3) home-delivered nutrition services, and (4) disease prevention and health promotion services are based on a population formula factor that is defined as each state's relative share of the total U.S. population aged 60 years and older. For the purposes of this calculation, the total U.S. population aged 60 and older includes all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories. Population data are from annual population estimates published by the U.S. Census; the reference date for estimates is July 1. There is a two-year time lag between the reference year of the population estimates and the respective appropriation year. For example, FY2016 state allotments are calculated using 2014 estimates of the population aged 60 and older.

For the purpose of determining state allotments, the law requires that allotments meet two criteria. The first criterion is the "small state minimum." This ensures that all states (including the District of Columbia and Puerto Rico) receive a minimum amount of funds, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands each are allotted no less than 0.25% (one-quarter of 1%) of the total grant amount, and American Samoa and the Commonwealth of the Northern Mariana Islands are each allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant amount.

The second criterion is the "hold harmless" provision. The OAA 2006 Amendments ensured that, provided sufficient funds, every state and U.S. territory received at least its FY2006 amount. If funding for a given year is equal to or less than FY2006 program amount, states received an allotment in proportion to their respective FY2006 allotments. If funding exceeded the FY2006 program amount, states receive no less than their FY2006 allotment.

The OAA 2006 Amendments phased out the "guaranteed growth" provision beginning in FY2008. This provision guaranteed that all states would receive a certain share of any increase above the FY2006 appropriation. For example, states' FY2010 allotments were at least their FY2006 amount plus an amount equal to 5% of the percentage increase in FY2010 program amount above FY2006 levels.

Beginning in FY2011, the guaranteed growth provision was phased out entirely. Thus, for FY2011 through FY2016 states and U.S. territories received an allotment based on their population formula factor, taking into account the following two criteria: (1) states will receive a minimum grant amount of at least 0.5% of the total grant appropriation (the same minimum grant amounts apply to U.S. territories), and (2) states and U.S. territories will receive no less than their FY2006 allotments, provided sufficient funding.

Analysis of OAA 2006 Amendments Funding Formula

Under prior law, which affected states allotments for FY2007 through FY2016, the effect of the FY2006 hold harmless criterion was to maintain funding in states that would otherwise have seen their allocations decrease due to changing population demographics; this effect was different for each program based on that program's current funding level in relation to its FY2006 funding level. Table 1 compares FY2006 to FY2016 enacted funding amounts for each program. (See Appendix A for state and U.S. territory FY2016 allotments and trends in the population formula factor aged 60 and over.)

If increases in appropriated funding for grant programs were relatively large compared to FY2006-appropriated levels, states generally received an allotment based on their population. Thus, the FY2006 hold harmless provision became less of a factor. Conversely, when appropriations increases were relatively small or non-existent, states generally received an allotment based on the FY2006 hold harmless provision.

Table 1 shows that for two programs, the supportive services and preventive services programs, FY2016-enacted funding was below FY2006 funding levels (-1.4% and -7.8%, respectively). Thus, for these two programs, state and U.S. territory allotments for FY2016 were proportionately reduced from their FY2006 hold harmless amounts. That is, for FY2016 all states and U.S. territories received an allotment that was below their FY2006 hold harmless amount. See Table A-1 (supportive services) and Table A-4 (preventive services) for comparisons of the FY2006 hold harmless amount and FY2016 allotment amount, as well as the FY2016 allotment type for states and U.S. territories.

For the congregate nutrition program, FY2016-enacted funding was 15.6% above the FY2006 hold harmless funding level. This increase was not enough to remove the entire effect of the FY2006 hold harmless provision. Thus, for FY2015 states and U.S. territories receive a program allotment that is either based on (1) the minimum allotment amount (0.5% of total program funding); (2) the entities' FY2006 hold harmless amount; or (3) an amount that is determined based on the entities' population formula factor. Note that entities receiving an allotment based on their population formula factor receive a reduced amount to compensate for the increased amounts allotted to states and U.S. territories that receive funding based on either a minimum or FY2006 hold harmless allotment in order to satisfy all statutory formula conditions. See Table A-2 (congregate nutrition) for comparisons of the FY2006 hold harmless amount and FY2016 allotment amount as well as the FY2016 allotment type for states and U.S. territories.

For the home-delivered nutrition program, FY2016-enacted funding was 23.7% above the FY2006 hold harmless funding level. Unlike the congregate nutrition program, this increase in home-delivered nutrition was enough of an increase to eliminate the effect of the FY2006 hold harmless provision. Thus, all entities receive their FY2016 funding based on either (1) the minimum allotment amount, or (2) an amount that is determined based on the entities' population formula factor. The effect of the FY2006 hold harmless statutory condition has been entirely eliminated with funding enough above FY2006 levels, which allows funding to be allocated based on the population aged 60 and older subject to the state minimum allotment criterion. See Table A-3 (home-delivered nutrition) for comparisons of the FY2006 hold harmless amount and FY2016 allotment amount, as well as the FY2016 allotment type for states and U.S. territories.

Allocation for Nutrition Services Incentive Program

The Nutrition Services Incentives Program (NSIP) provides funds to states, territories, and Indian tribal organizations to purchase food or to cover the costs of food commodities provided by the U.S. Department of Agriculture (USDA) for the congregate and home-delivered nutrition programs. NSIP funds are allotted to states and other entities based on a formula that takes into account each state's share of total meals served by the nutrition services program (both congregate and home-delivered meals) in all states and tribes during the prior year.

Allocation for the National Family Caregiver Support Program

The National Family Caregiver Support Program (NFCSP) provides direct services for caregivers in five core service areas:

• Information about health conditions, resources, and community-based services.
• Assistance with accessing available services.
• Individual counseling, support groups, and caregiver training.
• Respite care services to provide families temporary relief from caregiving responsibilities.
• Supplemental services on a limited basis that would complement care provided by family and other caregivers (e.g., adult day health care, home care, home modifications, and assistive devices).

Funds for NFCSP are allotted to states based on each state's relative share of the population aged 70 years and older. States receive a minimum grant amount, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands are allotted no less than 0.25% (one-quarter of 1%) of the total grant appropriation, and American Samoa and the Commonwealth of the Northern Mariana Islands are allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant appropriation. There is no hold harmless or guaranteed growth provision in the formula allocation for this grant program.

Title V: Community Service Employment for Older Americans

Title V authorizes the Community Service Employment for Older Americans Program (CSEOA).¹⁶ Administered by the Department of Labor (DOL), Title V is OAA's second-largest program and is the only federally subsidized employment program for low-income older persons (defined in the law as those aged 55 and older with incomes up to 125% of the federal poverty level). Its FY2016 funding of $434.4 million represents 23% of the act's total discretionary funding. There is a 10% nonfederal match requirement for Title V grant activities.

DOL allocates Title V funds for grants to state agencies in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories, and to national organizations. The total Title V state allotment is the sum of its respective state agency grantee allotment and national organization grantee allotment. To determine grant allotments for each state, a separate allocation is calculated for each grant type.

In the past, the Title V funding formula has been an issue for Congress.¹⁷ During the 2006 OAA reauthorization, the original House bill (H.R. 5293) included a provision to update the "hold harmless" year in the Title V formula from FY2000 to FY2006; however, the Senate bill (S. 3570) did not include this provision. The compromise bill (H.R. 6197) enacted into law made no changes to the Title V formula. The following describes the Title V formula allocation.¹⁸

Before allocation of funds to states, DOL is required to reserve funds as follows:

• up to 1.5% of the total appropriation for Section 502(e) demonstration projects, pilot projects, and evaluation projects;
• 0.75% of the total appropriation for Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands; and
• "such amount as may be necessary" for national grants to public or private organizations serving eligible Indians and Pacific Island and Asian Americans.

After these reservations, the remaining funds are divided into two amounts, one for all state agency grantees and the other for all national organization grantees. The allocation for these amounts is dependent on program funding. If funds for a given year are equal to their FY2000 level, then amounts set aside for all state agencies and all national organization grantees are in proportion to their respective FY2000 levels. If funds for a given year are less than their FY2000 levels, then total amounts for the state and national grantees are reduced proportionately. If funds for a given year exceed the FY2000 level, up to $35 million of the excess is to be distributed as follows: 75% of the excess is to be provided for all state agency grantees and 25% of the excess is to be provided to all national organization grantees. Any funding amount over $35 million that remains is to be distributed 50/50 to all state agency and national organization grantees, respectively.

Once the national totals for state agency and national organization grantees have been determined, the same formula is used to determine the state agency allotment and the national organization allotment for each state. Each allotment is distributed to states based on a formula factor that takes into account (1) a state's relative share of the total U.S. population aged 55 years and older (includes the District of Columbia and Puerto Rico), and (2) the relative state per capita income. The formula factor is the number of persons aged 55 and older in the state multiplied by the inverse of the state's per capita income index. Thus, this formula favors states with a lower per capita income and a higher proportion of the population aged 55 and older relative to other states. The inverse per capita income index cannot be less than 33% or greater than 75%; the index for the District of Columbia and Puerto Rico is 75%. Population data are from the annual population estimates published by the U.S. Census; the reference date for estimates is July 1. Per capita income data are from the Bureau of Economic Analysis (BEA) within the U.S. Department of Commerce (DOC). There is a two-year time lag between the data (reference year of the population estimates and per capita income) and the respective appropriation year.

For the purpose of determining state allotments to state agency and national organization grantees, the law requires that allotments meet two criteria. The first criterion is that states (including the District of Columbia and Puerto Rico) are to receive at least a minimum grant allotment, which is defined as 0.5% (one-half of 1%) of the respective grant amount for the given fiscal year. The second criterion is the "hold harmless" provision. If grant amounts for a given year are equal to, or less than, their FY2000 level, states are to receive an allotment in proportion to their respective FY2000 levels. If grant amounts exceed their FY2000 levels, states are to receive no less than their FY2000 level plus a "guaranteed growth" of at least 30% of the percentage increase above the FY2000 level.

Title VI: Grants for Older Native Americans

Title VI authorizes funds for supportive and nutrition services to older Native Americans to promote the delivery of home and community-based supportive services, nutrition services, and family caregiver support.¹⁹ Funds are awarded directly to Indian tribal organizations, Alaskan Native organizations, and non-profit groups representing Native Hawaiians. To be eligible for funding, a tribal organization must represent at least 50 Native American elders aged 60 or older.²⁰ In FY2015 grants were awarded to 264 tribal organizations representing 400 Indian tribes, including two organizations serving Native Hawaiian elders.²¹ FY2015 funding for supportive and nutrition services grants is $26.2 million, while FY2015 funding for the Native American caregiver program is $6.0 million. There is no requirement for tribal organizations to match these grant funds.

Separate formula grant awards are made for (1) nutrition and supportive services and (2) family caregiver support services. Formula grants for services to older Native Americans are allocated to tribal and other representing organizations based on their share of the American Indian, Alaskan Native, and Native Hawaiian population aged 60 and over in their services area. Tribal organization allotments must meet a FY1991 "hold harmless" provision. If funds for a given year exceed the FY1991 amount, then the grant amount is either (1) increased to equal or approximate the amount the organization received in 1980 or (2) determined based on what the Assistant Secretary considers sufficient if the tribal organization did not receive a grant for either FY1980 or FY1991. For Native Hawaiian programs, formula allotments for services to representing organizations are only required to meet a FY1991 "hold harmless" provision.

Title VII: Vulnerable Elder Rights Protection Activities

Title VII authorizes the Long-Term Care (LTC) Ombudsman Program and elder abuse, neglect, and exploitation prevention programs. Most Title VII funding is directed at the LTC Ombudsman Program, the purpose of which is to investigate and resolve complaints of residents of nursing facilities and other long-term care facilities. For FY2015, funding for the LTC Ombudsman and elder abuse, neglect, and exploitation prevention programs is $20.7 million. There is no requirement for states to match these grant funds.

Funds for LTC ombudsman and elder abuse prevention activities are allotted to states based on each state's relative share of the population aged 60 years and older. For the purpose of determining state allotments, the law requires that states (including the District of Columbia and Puerto Rico) receive a minimum amount of funds, which is defined as 0.5% (one-half of 1%) of the total grant appropriation for the respective fiscal year. Guam and the U.S. Virgin Islands are allotted no less than 0.25% (one-quarter of 1%) of the total grant appropriation, and American Samoa and the Commonwealth of the Northern Mariana Islands are allotted no less than 0.0625% (one-sixteenth of 1%) of the total grant appropriation.

State allotments must also meet a FY2000 "hold harmless" provision. SUAs may award funds for these activities to a variety of organizations for administration, including other state agencies, AAAs, county governments, nonprofit service providers, and volunteer organizations.

Appendix A. OAA Title III, Parts B, C, and D FY2016 Allotments and Population Trends

Table A-1, Table A-2, Table A-3, and Table A-4 compare the FY2006 hold harmless amounts and the FY2016 allotment amounts for states and U.S. territories for each of the four programs authorized under OAA Title III, Parts B, C, and D. The final column in each table provides information about the entities' FY2016 allotment type, where "M" refers to an entity that receives a minimum allotment amount; "HH" refers to an entity that receives an allotment amount based on the FY2006 hold harmless funding amount or a proportionately reduced allotment from the FY2006 hold harmless amount; and "P" refers to an entity that receives an allotment amount based on the entities' population formula factor.

Table A-5 shows the population aged 60 and older by state or U.S. territory and the proportion of the entity's population aged 60 and older relative to the total U.S. population aged 60 and over for selected years. U.S. Census data shown are for the 2000 and 2010 Decennial Censuses, as well as the 2014 Intercensal state population estimates, which is the most recent year for which data are available. The column labeled "% Age 60+" is the entities' population-based formula factor used to determine state allotments under OAA Title III, Parts B, C, and D.

The final column of Table A-5 calculates the percentage point change in the population formula factor for each state and U.S. territory. Among all states (which includes the District of Columbia and Puerto Rico), 48% saw a proportionate increase in the population formula factor from 2000 to 2014, while 52% saw a relative decrease over this time period. The top five states that experienced the greatest proportionate increase were Texas, California, Georgia, North Carolina, and Arizona. The bottom five states that experienced the greatest decline were New Jersey, Illinois, Ohio, Pennsylvania, and New York.

Appendix B. The Older Americans Act Reauthorization Act of 2016 (P.L. 114-144): Analysis of Formula Change

Section 4(b) of P.L. 114-144 changes the statutory funding allocations for OAA Title III, Parts B, C, and D, which allocate funding to supportive services, congregate nutrition, home-delivered nutrition, and preventive services. This provision retains the same state and territory minimum amounts allotted under current law and the same population-based formula factor (aged 60 and over), but reduces state and U.S. territory hold harmless amounts (currently referenced to FY2006 funding levels) by 1% from the previous fiscal year as follows:

• For FY2017, no state receives less than 99% of the annual amount allotted to the state in FY2016.
• For FY2018, no state receives less than 99% of the annual amount allotted to the state in FY2017.
• For FY2019, no state receives less than 99% of the annual amount allotted to the state in FY2018.
• For FY2020 and each subsequent fiscal year, no state receives less than 100% of the annual amount allotted to the state in FY2019.

P.L. 114-144 lessens the effect of the FY2006 hold harmless provision by reducing state and U.S. territory hold harmless amounts by 1% for each of three years, and then freezing this reduction in place for FY2020 and future fiscal years, unless or until such language is amended. Effectively, for those states that receive an annual program allotment based on their FY2006 hold harmless amount the policy change minimizes any reduction in funding to no more than 1% from the previous fiscal year, assuming a program's total funding level in fiscal years 2017 to 2019 is at or above the previous fiscal year's level.

Analysis of P.L. 114-144 Funding Formula Change

The following analysis compares FY2016 allotment amounts with simulated allotment amounts under the statutory funding formula change in P.L. 114-144. CRS separately simulated allotment amounts to states and U.S. territories for each of the four programs for which the formula change applies: Part B, supportive services and centers; Part C, subpart 1, congregate nutrition services; Part C, subpart 2, home-delivered nutrition services; and Part D, disease prevention and health promotion services programs.

Simulated allotment amounts for FY2017 through FY2019 assume changes to total program funding levels based on the authorizations of appropriations levels for each program as specified in P.L. 114-144. However, the analysis assumes no change to each entity's relative share of the total U.S. population aged 60 and over (the most recent U.S. Census data available is 2014, which is used in this analysis). Caution should be used when interpreting these results as these assumptions may not reflect actual increases or decreases in allotments; rather, the results from this analysis should be used to understand potential changes to allotments as a result of the policy change and any distributional changes that might occur, assuming appropriated funding amounts in future years are at authorized levels.

Table B-1, Table B-2, Table B-3, and Table B-4 provide results by Title III program. Each table compares FY2016 state and territory current law allotments to estimated allotments under P.L. 114-144, for each year of the funding formula change (FY2017 through FY2019). The columns in each table provide two types of analyses for each year. The first is the percent change between the entities' FY2016 current law allotment and the entities' estimated allotment for each year. The second is the entities' allotment type for each year of the change, where "M" refers to an entity that receives a minimum allotment amount; "HH" refers to an entity that receives an allotment amount based on 99% of the previous fiscal year's hold harmless funding amount; and "P" refers to an entity that receives an allotment amount based on the entities' population formula factor.

For programs where the current law FY2006 hold harmless is in effect (i.e., some states and territories receive an allotment based on their hold harmless), and holding population constant, the provision reduces the effect of the hold harmless over time. For example, 16 states and territories receive an allotment based on their FY2006 hold harmless level for congregate nutrition services in FY2016. Under this provision, the number of states and territories estimated to receive an allotment based on the hold harmless (99% of the previous fiscal year) in FY2017 would decline to 10. That number would fall to 7 in FY2018 and 2 in FY2019. As a state or territory's hold harmless amount is reduced gradually by 1% from the previous year's hold harmless, over time fewer states and territories would receive funding based on their hold harmless amount. Effectively, this change allows funding freed up from the home harmless reductions to be redistributed to states and territories based on the population formula factor. Thus, it is estimated that more states and territories would receive funding based on their population aged 60 and over.

Under the supportive services and centers and disease prevention and health promotion services programs all states and territories are receiving funding in FY2016 based on a proportionate reduction to their FY2006 hold harmless amount. Total FY2016 funding for these programs is below FY2006 funding levels. Similarly, it is estimated that this provision would reduce the number of entities' receiving an allotment based on their hold harmless over time (for supportive services, 23 states in FY2017, to 16 in FY2018, and 10 in FY2019; and for disease prevention, 22 states in FY2017, to 8 in FY2018, and 1 in FY2019).

For programs where the FY2006 hold harmless is not in effect, such as home- delivered nutrition services, the provision would have no effect compared to prior law. Also, it would not affect entities receiving an allotment based on the minimum grant amount as P.L. 114-144 makes no change to this provision.