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Friday, June 15, 2012

The Low Income Home Energy Assistance Program (LIHEAP): Program and Funding

Libby Perl
Specialist in Housing Policy

The Low Income Home Energy Assistance program (LIHEAP), established in 1981 as part of the Omnibus Budget Reconciliation Act (P.L. 97-35), is a block grant program under which the federal government makes annual grants to states, tribes, and territories to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: regular funds (sometimes referred to as formula or block grant funds), which are allocated to all states using a statutory formula, and emergency contingency funds, which are allocated to one or more states at the discretion of the Administration in cases of emergency as defined by the LIHEAP statute.

States may use LIHEAP funds to help households pay for heating and cooling costs, for crisis assistance, weatherization assistance, and services (such as counseling) to reduce the need for energy assistance. According to the most recent data available from the Department of Health and Human Services (HHS), in FY2008, 53.3% of funds went to pay for heating assistance, 3.1% was used for cooling aid, 19.0% of funds went to crisis assistance, and 10.1% was used for weatherization. The LIHEAP statute establishes federal eligibility for households with incomes at or below 150% of poverty or 60% of state median income, whichever is higher, although states may set lower limits. In both the FY2009 and FY2010 appropriations acts, Congress gave states the authority to raise their LIHEAP eligibility standards to 75% of state median income. In FY2009, the most recent year for which HHS data are available, an estimated 35 million households were eligible for LIHEAP under the federal statutory guidelines (45 million were eligible based on the appropriations provision). According to HHS, 7.4 million households received heating or winter crisis assistance and approximately 900,000 households received cooling assistance that same year.

For FY2012, the Consolidated Appropriations Act (P.L. 112-74) provided $3.472 billion for LIHEAP formula grants; there was no appropriation for emergency contingency funds. The amount appropriated for formula grants was actually $3.478 billion, but application of an acrossthe- board rescission of 0.189% for discretionary accounts resulted in the final appropriation of $3.472 billion. Funding for LIHEAP in FY2012 was about $1.2 billion less than was provided in FY2011, when Congress appropriated $4.5 billion for regular funds and $200 million for emergency contingency funds, but exceeded the President’s total request ($1.98 billion for regular funds and $590 million for emergency contingency funds) by about $900 million. HHS announced final distributions to the states on January 19, 2012 (see Table A-1).

For FY2013, the President proposed a total of $3.02 billion for LIHEAP, $2.82 billion in regular funds and $200 million in emergency contingency funds. The regular funds would be distributed similarly to the way in which Congress has appropriated funds since FY2009—a portion of funds, approximately $2.42 billion, would be distributed according to the proportions of the “old” LIHEAP formula, and the remainder, $403 million, distributed according to the “new” LIHEAP formula.

Date of Report: June 5, 2012
Number of Pages: 26
Order Number: RL31865
Price: $29.95

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