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Thursday, January 3, 2013

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% of funds went to pay for heating assistance, 3% was used for cooling aid, 19% of funds went to crisis assistance, and 10% 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 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. According to HHS, 7.4 million households received heating or winter crisis assistance and approximately 900,000 households received cooling assistance in that year.

For FY2013, Congress approved a six-month Continuing Resolution (CR, P.L. 112-175) to provide funding for most federal programs at FY2012 levels through March 27, 2013. In addition, the CR includes an across-the-board increase in funding of 0.612%. For LIHEAP, this means a funding level of $3.493 billion in formula grants, and no funding for emergency contingency funds. On November 8, 2012, HHS announced the amount of funds that would be distributed to the states, tribes, and territories pursuant to the CR (see Table B-1).

The CR resolved differences between FY2013 appropriations bills in the House and Senate. The CR provides that, of the amount appropriated for LIHEAP, $497 million be distributed according to the “new” LIHEAP formula, with the remainder distributed according to the “old” LIHEAP formula. Earlier proposals approved by the Senate Appropriations Committee (S. 3295), and the House Appropriations Subcommittee for the Departments of Labor, Health and Human Services, and Education, would have applied the “old” and “new” LIHEAP formulas differently, resulting in differing allocations to the states despite similar proposed funding levels. (See “Recent LIHEAP Appropriations.”)

This report discusses the LIHEAP program rules and benefits, funding for the program, and the legislative history of energy assistance programs leading up to and including LIHEAP.

Date of Report: December 11, 2012
Number of Pages: 39
Order Number: RL31865
Price: $29.95

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