Low-The LIHEAP Formula: Legislative History and Current Law

The LIHEAP Formula:
Legislative History and Current Law
Updated November 19, 2008
Libby Perl
Analyst in Housing Policy
Domestic Social Policy Division

The LIHEAP Formula:
Legislative History and Current Law
Summary
The Low Income Home Energy Assistance Program (LIHEAP) provides funds
to states, the District of Columbia, U.S. territories and commonwealths, and Indian
tribal organizations (collectively referred to as grantees) primarily to help low-
income households pay home energy expenses. The LIHEAP statute provides for
two types of funding: regular funds (sometimes referred to as block grant funds) and
emergency contingency funds. Regular funds are allocated to grantees based on a
formula, while contingency funds may be released to one or more grantees at the
discretion of the Secretary of the Department of Health and Human Services based
on emergency need.
Regular LIHEAP funds are allocated to the states according to a formula that
has a long and complicated history. (Tribes receive funds based on their number of
federally eligible LIHEAP households compared to the total number in the state,
whereas territories receive a set percentage of total LIHEAP regular funds.) In 1980,
Congress created the predecessor program to LIHEAP, the Low Income Energy
Assistance Program (LIEAP) as part of the Crude Oil Windfall Profits Tax Act (P.L.
96-223). Because Congress was particularly concerned with the high costs of
heating, funds under LIEAP were distributed according to a multi-step formula that
benefitted cold-weather states. In 1981, Congress enacted LIHEAP as part of the
Omnibus Budget Reconciliation Act (P.L. 97-35), replacing LIEAP. However, the
LIHEAP statute 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 as part of the Human Services
Reauthorization Act (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 both
heating and cooling costs of low-income households (a change from the focus on the
heating needs of all households). The effect of these changes meant that, in general,
funds would be shifted from cold-weather states to warm-weather 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
(sometimes referred to as the “new” 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 a hypothetical FY1984
appropriation of $1.975 billion. Above this level, funds are allocated according to
Tier II of the formula, which includes a hold-harmless level to prevent certain 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.
Since FY1986, LIHEAP regular fund appropriations have exceeded the equivalent
of an FY1984 appropriation of $1.975 billion on three occasions: in FY2006, when
the regular fund appropriation was $2.48 billion; in FY2008, when appropriations
slightly exceeded the trigger; and in FY2009, when Congress directed that $840
million be distributed according to the “new” LIHEAP formula.

Contents
In troduction ......................................................1
Predecessor Programs to LIHEAP.....................................2
Community Services Administration Energy Assistance Programs.......3
Low Income Energy Assistance Program (LIEAP)....................6
The LIEAP Formula........................................7
Enactment of LIHEAP.............................................10
Continued Use of the LIEAP Formula.............................11
The 1984 LIHEAP Reauthorization: A New Formula................11
Formula Discussions......................................11
Introduction of a Hold-Harmless Level........................12
Introduction of a Hold-Harmless Rate.........................12
LIHEAP Formula Statutory Language.........................13
Determining LIHEAP Regular Fund Allotments Using the “New” Formula...14
Calculating the New Formula Rates..............................14
Using the New Formula Rates to Allocate Funds to the States..........17
Tier I: Below $1.975 Billion................................17
Tier II: From $1.975 Billion up to $2.25 Billion................18
Tier III: At or Above $2.25 Billion...........................19
Implementation of the “New” LIHEAP Formula....................20
Appendix A: Estimated Appropriations to the States Under Various
Hypothetical Appropriation Levels...............................23
Appendix B: Further Depiction of How State Allotments
Depend Upon Appropriation Levels..............................26
Appendix C: Actual LIHEAP Allocations to the States, FY2006-FY2009.....28
List of Figures
Figure 1. Estimated Low Income Home Energy Assistance (LIHEAP)
Allocations at Various Hypothetical Appropriations Level for
Three Types of States..........................................27
List of Tables
Table 1. Select Energy Assistance Formulas, FY1975-FY1980..............6
Table 2. Distribution of Funds Under LIEAP...........................10
Table 3. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, 2008...................21

Table A-1. LIHEAP Estimated State Allotments for Regular Funds
at Various Hypothetical Appropriation Levels......................24
Table C-1. LIHEAP Actual State Regular Fund Allotments for
FY2006 through FY2009.......................................29

The LIHEAP Formula:
Legislative History and Current Law
Introduction
The Low Income Home Energy Assistance Program (LIHEAP) is a block grant
program administered by the Department of Health and Human Services (HHS)
under which the federal government gives annual grants to states, the District of
Columbia, U.S. territories and commonwealths, and Indian tribal organizations to¹
operate multi-component home energy assistance programs for needy households.
Established in 1981 by Title XXVI of P.L. 97-35, the Omnibus Budget
Reconciliation Act, LIHEAP has been reauthorized and amended a number of times,
most recently in 2005, when P.L. 109-58, the Energy Policy Act, authorized annual²
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 heating and cooling costs, receive crisis assistance, 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 federally 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 HHS data show that an
estimated 5.3 million households received winter heating or winter crisis assistance
in FY2005 (the majority of LIHEAP funds pay for heating assistance).³
The LIHEAP statute provides for two types of program funding: regular funds
— sometimes referred to as block grant funds — and emergency contingency funds.
Regular funds are allotted to states on the basis of the LIHEAP statutory formula,
which was enacted as part of the Human Services Reauthorization Act of 1984 (P.L.
98-558).⁴ The way in which regular funds are allocated to states depends on the
amount of funds appropriated by Congress. The second type of LIHEAP funds,
emergency contingency funds, may be released and allotted to one or more states at

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 LIHEAP is codified at 42 U.S.C. §§8621-8630.
³ U.S. Department of Health and Human Services, Administration for Children and Families,
FY2005 LIHEAP Report to Congress, April 24, 2008, p. 20.
⁴ The formula section is codified at 42 U.S.C. §8623.

the discretion of the President and the Secretary of HHS.⁵ 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.⁶
The remainder of this report discusses only the history and methods of
distributing regular LIHEAP funds.
Predecessor Programs to LIHEAP
The mid- to late-1970s, a time marked by rapidly rising fuel prices, also marked
the beginning of federal energy assistance funding for low-income households. The
first national program to help low-income households was created in early 1975 to
assist families with energy conservation primarily through home weatherization. This
assistance was provided through a new Emergency Energy Conservation Program
(EECP), enacted as part of the Headstart, Economic Opportunity, and Community
Partnership Act of 1974 (P.L. 93-644). The funds were administered by the
Community Services Administration (CSA), the successor agency to the Office of
Economic Opportunity, which was responsible for many of the programs created as
part of the 1964 war on poverty. Beginning in 1977, funds were also made available
through the CSA to help families directly pay for fuel (as opposed to weatherization
expenses) via a variety of programs. Each of these programs had in common a focus
on the need for heating assistance (versus cooling assistance).
Congress continued to appropriate funds for energy assistance programs through
FY1980, at which point a new program, the Low Income Energy Assistance Program
(LIEAP) was enacted as part of the Crude Oil Windfall Profits Tax Act of 1980 (P.L.
96-223). LIEAP, which was administered by the Department of Health and Human
Services (HHS), was funded for one year, FY1981, before the creation of LIHEAP.
Like the CSA programs, LIEAP emphasized heating over cooling needs. This
preference was reflected in both the CSA program formulas and the LIEAP set of
formulas, which used variables that benefitted cold-weather states to determine how
funds would be distributed. The LIEAP set of formulas continues to have relevance
for the way in which LIHEAP funds are distributed. This section of the report
describes these predecessor programs to LIHEAP and their distribution formulas.

⁵ 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.
⁶ The statutory definition of emergency includes a significant home energy supply shortage
or disruption, a significant increase in the cost of home energy, a significant increase in
home energy disconnections, a significant increase in participation in a public benefit
program, a significant increase in unemployment, or an event meeting such criteria as the
Secretary determines to be appropriate. 42 U.S.C. §8622.

Community Services Administration
Energy Assistance Programs
On January 4, 1975, President Ford signed into law the Headstart, Economic
Opportunity, and Community Partnership Act of 1974 (P.L. 93-644), which
contained funds for a new program, called the Emergency Energy Conservation
Program (EECP). The program was to be administered by the Community Services
Administration (CSA), and its purpose was
to enable low-income individuals and families, including the elderly and the near
poor, to participate in energy conservation programs designed to lessen the
impact of the high cost of energy ... and to reduce ... energy consumption.
The law governing EECP listed a number of eligible activities in which states could
participate, including energy conservation and education programs; weatherization
assistance; loans and grants for the purchase of energy conservation technologies;
alternative fuel supplies; and fuel voucher and stamp programs. Despite the variety
of activities that could be funded through the program, the first CSA funding notice
regarding the program limited eligible activities to “winterizing” homes and to giving
emergency assistance “to prevent hardship or danger to health due to utility shutoff
or lack of fuel.”⁷ During the four years the EECP was funded, the majority of funds
were used for weatherization expenses.⁸
EECP funds were distributed to states via a formula that benefitted those states
with high heating costs. One formula variable in particular, a measure of “coldness”
called heating degree days, benefitted cold-weather states. Heating degree days
measure the extent to which a day’s average temperature falls below 65° Fahrenheit.
For example, a day with an average temperature of 50° results in a measure of 15
heating degree days. Because heating degree days are higher in cold weather states,
including the heating degree day variable in a formula favors states with greater
heating needs. Squaring the heating degree days magnifies this effect.⁹ The EECP
formula took the number of population-weighted heating degree days in each state,
squared them, and multiplied the result by the number of households in poverty that
owned their homes to determine how funds would be allocated.¹⁰ The CSA

⁷ Community Services Administration, “Character and Scope of Specific Community Action
Programs: Emergency Energy Conservation Program,” Federal Register, vol. 40, no. 145,
July 28, 1975, p. 31603.
⁸ See, for example, House Appropriations Committee, report to accompany H.R. 4877, the
FY1977 Supplemental Appropriations Act, 95^th Cong., 1^st sess., H.Rept. 95-68, March 11,
1977: “The funds in this program are used primarily to purchase materials to insulate the
homes of low-income families.”
⁹ For example, if a southern state experiences 700 heating degree days in a year and a
northern state experiences 7,000, the northern state has 10 times as many heating degree
days as the southern state. However, if both numbers are squared, the northern state has 100
times as many heating degree days as the southern state.
¹⁰ Community Services Administration, “Emergency Energy Conservation Program:
Submission of Funding Plans,” Federal Register, vol. 41, no. 208, October 27, 1976, p.
(continued...)

acknowledged the emphasis on heating needs in its formula, stating that the FY1975
allocation “was heavily weighted to the coldest areas...”¹¹ In the three fiscal years
that followed the first appropriation for the EECP, from FY1976 through FY1978,
the CSA changed somewhat the way in which it allocated funds to the states;
however, the factors continued to favor cold-weather states through use of either
heating degree days or heating degree days squared.¹²
The first year that Congress specifically appropriated funds for direct assistance
to help low-income households (those at or below 125% of poverty) pay their energy
costs (instead of funds that went primarily for weatherization and conservation
activities) was FY1977. The FY1977 Supplemental Appropriations Act (P.L. 95-26)
provided $200 million for a Special Crisis Intervention Program to be administered
by CSA. States could use funds to make direct payments to fuel providers on behalf
of low-income families lacking the financial resources to pay their energy bills. The
CSA directed states to target households where utilities had been shut off (or were
threatened with shut off) and who could prove dire need due to large energy bills.¹³
Although the law did not reserve funds exclusively for heating costs, the way in
which funds were allocated to the states emphasized heating need. Funds were
distributed to the states based on a formula that used (1) heating degree days
squared, (2) the number of households in poverty, (3) the number of persons above
age 65 with incomes below 125% of poverty, and (4) the relative cost of fuel in the
region.¹⁴ Congress again appropriated $200 million for crisis intervention in both
FY1978 and FY1979.¹⁵ In FY1978, funds were available to households with the
need for assistance as the result of an energy-related emergency such as lack of fuel,
a natural disaster, fuel shortages, and widespread unemployment.¹⁶ In FY1979, funds
were made available to assist families facing “substantially increased energy costs

¹⁰ (...continued)

47096.

¹¹ Federal Register, vol. 41, no. 208, October 27, 1976, p. 47096.
¹² See Ibid., pp. 47096-47097.
¹³ Community Services Administration, “Special Crisis Intervention Program: General
Information, Application Procedures, and Post Grant Requirements,” Federal Register, vol.

42, no. 125, June 29, 1977, p. 33240.

¹⁴ The formula was described in the Senate Appropriations Committee report to accompany
H.R. 4877, the FY1977 Supplemental Appropriations Act, 95^th Cong., 1^st sess., S.Rept. 95-
64, March 24, 1977. The CSA implemented this formula, which it described in guidance
to the states. See the Federal Register, Ibid.
¹⁵ Funds were appropriated through the FY1978 Supplemental Appropriations Act (P.L. 95-
240) and in FY1979 through a continuing resolution (P.L. 95-482). In FY1978, Congress
called the program Emergency Energy Assistance Program and in FY1979 called it the
Crisis Intervention Program (excluding the word “Special” from the title).
¹⁶ Community Services Administration, “Emergency Energy Conservation Program: Funding
Requirements for Emergency Energy Assistance Program,” Federal Register, vol. 43, no.

46, March 8, 1978, p. 9476.

and/or life- or health-threatening situations caused by winter-related energy
em ergenci es.”¹⁷
In FY1980, Congress appropriated a total of $1.6 billion for energy assistance.
Of this amount, $400 million was appropriated for the Energy Crisis Assistance
Program (ECAP, a CSA program similar to the Special Crisis Intervention Program)
through two separate appropriations.¹⁸ The remainder, $1.2 billion, was appropriated
as part of the FY1980 Department of the Interior Appropriations Act (P.L. 96-126)
to the Department of Health, Education, and Welfare (HEW, the predecessor to
HHS) for cash assistance and crisis intervention due to high energy costs. This
appropriation to HEW is sometimes referred to as Low Income Supplemental Energy
Allowances. Of this $1.2 billion, $400 million was to be distributed specifically to
recipients of Supplemental Security Income (SSI). The rest of the funds appropriated
to HEW, approximately $800 million, as well as the ECAP funds, were distributed
to states on the basis of three factors: heating degree days squared, the number of
households below 125% of poverty, and the difference in home heating energy
expenditures between 1978 and 1979. The formula used to distribute the $400
million for SSI recipients used these same factors but also included the number of
SSI recipients in each state relative to the national total.

¹⁷ Community Services Administration, “Emergency Energy Conservation Program: Fiscal
Year 1979 Crisis Intervention Program,”Federal Register, vol. 43, no. 250, December 28,

1978, pp. 60466-60467.

¹⁸ Congress appropriated $250 million for ECAP as part of an FY1980 Continuing
Resolution (P.L. 96-123, referencing the FY1980 Departments of Labor, Health and Human
Services and Education Appropriations bill, H.R. 4389), and appropriated an additional
$150 million as part of the Department of the Interior Appropriations Act (P.L. 96-126).

Table 1. Select Energy Assistance Formulas, FY1975-FY1980
^E^m^{ergency E}ⁿ^ergy^a^Specia^l^Crisis^b^Lo^w^Inco^m^e^Supplem^ent^a^l^c
^C^oⁿ^s^ervati^oⁿ^Program^:^Iⁿ^terven^ti^on^Program^:^Eⁿ^{ergy Allow}^a^nces^:
^FY¹⁹⁷⁵^FY¹⁹⁷⁷^FY¹⁹⁸⁰
^(P.L^{. 93-644)}^(P.L^{. 95-26)}^(P.L^{. 96-126)}
⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e²⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s⁾²^½⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e²
^day^s⁾^*ⁿ^u^m^{ber of}^day^s⁾^*ⁿ^u^m^{ber of}
^h^o^m^e^owⁿ^e^rsⁱⁿ^pov^ert^y^h^o^u^s^eh^ol^ds^bel^o^w^125%^of
^pov^ert^y
^N^u^m^b^{er of}^h^o^u^s^eh^ol^dsⁱⁿ^½^D^if^f^e^r^eⁿ^{ce in}^h^o^m^e^h^eatin^g
^pov^ert^y^ex^pen^dⁱ^t^u^res^bet^w^een¹⁹⁷⁸
^an^{d 1979}
^N^u^m^b^{er of}^pers^on^s^ov^{er ag}^e
⁶⁵^w^ithⁱⁿ^co^m^e^{less th}^an
^125%^of^pov^ert^y
^R^e^lativ^{e cos}^t^of^f^u^el
^Source:^F^o^{r t}^h^{e f}^o^rm^u^l^{a u}ⁿ^d^{er P.L}^.^93-^{644, s}^{ee C}^o^m^m^uⁿⁱ^t^y^S^e^rvⁱ^ces^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ^,^“^E^m^e^rg^en^cy
^Eⁿ^e^r^gy^Co^nse^r^va^tⁱ^o^{n P}^r^o^g^r^a^m^:^Sub^mⁱ^s^sⁱ^oⁿ^o^f^Fundⁱ^{ng P}^l^aⁿ^s,^”^Feder^a^{l Regis}^t^er^{, v}^o^l^.^{41, n}^o^{. 208,}
^October^27,^{1976, p. 47096. For th}^{e f}^o^rm^u^l^{a u}ⁿ^d^{er P}^.^L^.^95-^26,^s^ee^Sen^a^te^A^ppropriation^s^C^o^m^m^ittee,^th^st
^{report to accom}^p^an^y^H.R^.^{4877, th}^{e F}^Y^{1977 S}^u^pplem^en^{tal A}^ppropriation^s^A^c^t,⁹⁵^C^oⁿ^g^{., 1}^se^ss.^,
^S^.^R^e^pt^{. 95-}^{64, March}^{24, 1977. T}^h^{e f}^o^rm^u^l^{a f}^o^{r P.L}^.^96-^{126 i}^s^con^t^aiⁿ^e^{d w}ⁱ^t^hⁱⁿ^t^h^{e l}^a^w^.
^*^Mu^ltip^lied^b^y^.
^a.^O^f^t^h^{e f}^uⁿ^d^s^appropri^a^t^e^{d f}^o^{r t}^h^{e Em}^erg^eⁿ^c^y^En^erg^y^C^oⁿ^s^erv^a^tⁱ^oⁿ^Prog^ram^,^90%^w^e^re^di^s^t^ri^bu^t^e^d
^vⁱ^a^th^e^f^o^rm^u^l^a,^w^h^ile^th^{e rem}^aⁱⁿⁱⁿ^g^{10% w}^e^{re div}ⁱ^{ded am}^on^g^th^{e 12 coldes}^{t s}^t^ates^as^m^eas^u^r^ed
^b^y^he^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s^.
^{b. T}^h^{e Special C}^r^is^is^In^terv^en^tion^P^r^og^ram^didⁿ^o^t^s^p^ecif^y^a^w^e^ig^h^t^f^o^{r each}^of^th^{e f}^o^u^r^v^a^riables^u^s^ed
^to^d^e^ter^mⁱⁿ^{e allo}^catioⁿ^s^.
^{c. Of}^th^{e $1.6 billion}^appropriated^f^o^r^en^erg^y^as^sⁱ^s^t^an^ceⁱⁿ^FY1980,^{$400 m}^illion^w^a^s^s^e^{t as}^{ide f}^o^r²
^{SSI recipien}^ts^{. T}^h^{e f}^o^rm^u^l^{a to dis}^t^ribu^{te th}^os^{e f}^uⁿ^d^s^w^a^sa^he^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s^*ⁿ^u^m^ber^of
^h^o^u^s^eh^ol^ds^bel^o^w^125%^of^pov^ert^y^,a^di^f^f^e^ren^ceⁱⁿ^h^o^m^e^h^eatⁱⁿ^g^ex^pen^dⁱ^t^u^res^bet^w^een¹⁹⁷⁸
^an^{d 1979, an}^da^{SSI recipien}^tsⁱⁿ^each^s^t^{ate re}^lativ^{e to th}^{e n}^a^tion^a^{l total.}
Low Income Energy Assistance Program (LIEAP)
In April 1980, Congress replaced the patchwork energy assistance programs of
the late 1970s with one program, the Low Income Energy Assistance Program
(LIEAP). LIEAP, the direct predecessor program to LIHEAP, was established as part
of the Crude Oil Windfall Profits Tax Act of 1980 (P.L. 96-223). The program was
introduced in the Senate as the Home Energy Assistance Act (S. 1724) and was
incorporated into H.R. 3919, the bill that would become the Crude Oil Windfall
Profits Tax Act, on the Senate floor. Like the energy assistance programs of the late
1970s such as the Special Crisis Intervention Program and the Low Income
Supplemental Energy Allowances, LIEAP allocated funds to states in order to help
low-income households pay their home energy costs. Also like these predecessor
programs, LIEAP allocated funds to states using a method that put more emphasis
on the heating needs of cold-weather states than it did on cooling needs.
During the 1970s, home energy costs had increased substantially while wages
failed to keep up. According to the report from the Senate Committee on Labor and

Human Resources that accompanied the Home Energy Assistance Act (S. 1724),
between 1972 and 1979, heating oil prices increased by 293%, natural gas prices by
155%, and electricity prices by 91%, while wages grew by 59% during the same
period.¹⁹ During 1978, low-income households spent an estimated 18.4% of their
income, on average, to pay their utilities, with expenditures in New England by low-
income households exceeding 30% of income.²⁰ The Senate Committee on Labor
and Human Resources held numerous hearings about the need for energy assistance
to address the “dramatically rising cost of home heating.”²¹
The resulting formula in S. 1724 reflected, in part, the committee’s concern that
the problem of rising energy costs were “most critical in areas with high home
heating costs.”²² Although subsequent changes were made to the LIEAP formula in
S. 1724 before it was enacted, the need for heating assistance continued to be
paramount. The formula developed under LIEAP has been used to distribute
LIHEAP funds as recently as FY2007, so the variables used are important in
understanding the current formula and the way in which it is used to distribute funds.
The LIEAP Formula. When the Home Energy Assistance Act (S. 1724) was
introduced, it contained a formula that would have distributed funds to the states on
the basis of half on residential energy expenditures and half on heating degree days
(the heating degree day measure is described in the previous section “Community
Services Administration Energy Assistance Programs”). However, on the Senate
floor, the program formula was amended, resulting in a multi-part formula under
which states would receive funds.
Formula Under P.L. 96-223. Under the final LIEAP formula in P.L. 96-223,
states received funds under one of four alternative formulas used to measure home
energy need, depending on which one benefitted a state the most. Three of the four
formulas contained different combinations of several factors: residential energy
expenditures; heating degree days or heating degree days squared; and the number
of low-income households in the state.
^!Under the first formula alternative, half of the allocation was based
on residential energy expenditures and half on heating degree days
squared multiplied by the number of households at or below the
Bureau of Labor Statistics (BLS) lower living standard.²³

¹⁹ Senate Committee on Labor and Human Resources, Home Energy Assistance Act, report
to accompany S. 1724, 96^th Cong., 1^st sess., S.Rept. 96-378, October 25, 1979, p. 2.
²⁰ Ibid., p. 3.
²¹ Also discussed at the hearings was “the need for some level of assistance to be provided
to certain eligible households, where excessive heat is a factor in threatening life and
health.” Ibid., p. 5. This did not figure prominently into the formula, however.
²² Ibid., p. 12.
²³ The BLS determined the lower living standard 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
(continued...)

^!Under the second formula alternative, one quarter of the allocation
was based on residential energy expenditures and three quarters
based on heating degree days squared multiplied by the number of
households at or below the BLS lower living standard.
^!Under the third formula alternative, half of the allocation was based
on residential energy expenditures and half based on heating degree
days (not squared) multiplied by the number of households with
incomes at or below the BLS lower living standard.
The fourth option guaranteed states a minimum benefit of $120 for each household
that received Aid to Families with Dependent Children (AFDC) or Food Stamp
benefits. (See Table 2 for a breakdown of these formulas.)
All formulas in P.L. 96-223 effectively gave preference to states with colder
climates due to the variables used. As discussed earlier in this report, the heating
degree day variable is a measure of temperatures below 65° F and therefore favors
cold-weather states. Squaring the heating degree day variable magnifies the
discrepancy between warm- and cold-weather states. In addition, residential energy
expenditures of all households (rather than energy expenditures of low-income
households only) are higher in cold-weather states because, on average, the
proportion of poor families in warm-weather states is higher than that in cold-weather
states. However, the LIEAP law did allow states to provide for cooling when
households could demonstrate medical necessity.²⁴ Congress authorized LIEAP for
one year, FY1981, at $3 billion, but funds were not appropriated as part of P.L. 96-

223.

Formula Under P.L. 96-369. Before the formula in P.L. 96-223 could be
used to allocate funds, 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 October of 1980, six months
after enactment of the Crude Oil Windfall Profits Tax Act. The new allocation
method was not described in P.L. 96-369, however. Instead, the continuing
resolution referred to a House Appropriations Committee report (H.Rept. 96-1244)
accompanying another bill — the FY1981 Departments of Labor, Health and Human
Services and Education Appropriations Act. It was in this committee report that the

²³ (...continued)
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.
²⁴ According to the law, “The State is authorized to make grants to eligible households to
meet the rising costs of cooling whenever the household establishes that such cooling is the
result of medical need pursuant to standards established by the Secretary.”

specific formula components for LIEAP were laid out.²⁵ H.Rept. 96-1244 did little
to erode the defacto cold-weather states preference enacted in the original LIEAP
formula.
The first step in the new 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 formula alternative, half of the allocation was based
on the increase in home heating expenditures, 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 formula alternative, one quarter of the allocation
was based on total residential energy expenditures, 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
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. States would then receive the
greater of these two amounts.
Although the alternative formulas 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. For example, the BLS lower living standard was higher than
125% of poverty for most household sizes, which benefitted the South, where the
low-income population was higher.²⁶ The original set of formulas also provided for
a minimum benefit to states on the basis of the number of AFDC and Food Stamp
recipient households, unconditioned on their household heating expenditures. In
addition, the inclusion of the increase in home heating expenditures in H.Rept. 96-
1244 benefitted northeastern states, where heating oil prices had increased
substantially.²⁷

²⁵ House Committee on Appropriations, report to accompany H.R. 7998, the FY1981
Departments of Labor, Health and Human Services, and Education Appropriations Act, 96^th^nd
Cong., 2 sess., H.Rept. 96-1244, August 21, 1980, pp. 75-76.
²⁶ “The Low-Income Home Energy Assistance Program: An Analysis of the 1984
Reauthorization Issues,” Coalition of Northeastern Governors, April 1984, p. 5.
²⁷ H.Rept. 96-1244 did not specify the years between which the increase in home heating
expenditures should be measured. In implementing the formula, HHS measured the increase
between 1978 and 1980.

Table 2. Distribution of Funds Under LIEAP
^P.L^.^96-223^P.L^.^96-369
^A^s^sⁱ^gⁿ^each^s^t^{ate th}^{e option}^uⁿ^d^{er w}^h^ich^th^ey^Each^s^t^{ate receiv}^e^s^th^{e g}^r^{eater of}^{75% of}^th^e
^receiv^e^th^{e g}^r^eates^{t proportion}^of^f^uⁿ^d^s^.^If^am^ouⁿ^t^uⁿ^d^{er P.L}^.^96-^{223 or O}^p^tⁱ^oⁿ^{1 or}
^O^p^tⁱ^oⁿ^s^{2 an}^{d 3 bot}^h^res^u^l^tⁱⁿ^{a g}^r^eat^er^O^p^tⁱ^oⁿ^{2 u}ⁿ^d^{er P.L}^.^96-^369.
^proportⁱ^oⁿ^t^h^an^O^p^tⁱ^oⁿ^{1, as}^sⁱ^gⁿ^t^h^{e s}^t^at^{e t}^h^e
^l^e^s^s^e^{r of}^O^p^tⁱ^oⁿ^{2 or 3.}
^Op^tioⁿ¹^:^½^R^esid^en^{tial en}^er^g^y^Op^tioⁿ¹^:^½^Iⁿ^c^r^{ease in}^h^o^m^e^h^eatin^g^a
^ex^p^eⁿ^d^itu^r^e^s^ex^pen^dⁱ^t^u^res^f^r^om^1978-¹⁹⁸⁰
^½⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s⁾²^*^½⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s⁾²^*
^Ho^u^s^eh^o^l^d^s^w^ithⁱⁿ^co^m^e#^P^o^p^u^latioⁿ^w^ithⁱⁿ^co^m^e#
^B^L^{S lo}^w^e^r^livⁱⁿ^g^stan^d^a^r^d^125%^of^pov^ert^y
^Op^tioⁿ²^:^¼^R^esid^en^{tial en}^er^g^y^Op^tioⁿ²^:^¼^T^o^t^{al r}^e^sid^eⁿ^{tial en}^er^g^y
^ex^p^eⁿ^d^itu^r^e^s^ex^pen^dⁱ^t^u^res¹⁹⁸⁰
^¾⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s⁾²^*^¾⁽^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s⁾²^*
^Ho^u^s^eh^o^l^d^s^w^ithⁱⁿ^co^m^e#^Ho^u^s^eh^o^l^d^s^w^ithⁱⁿ^co^m^e#
^B^L^{S lo}^w^e^r^livⁱⁿ^g^stan^d^a^r^d^B^L^{S lo}^w^e^r^livⁱⁿ^g^stan^d^a^r^d
^Op^tioⁿ³^:^½^R^esid^en^{tial en}^er^g^y
^ex^p^eⁿ^d^itu^r^e^s
^½^H^e^a^tⁱ^{ng d}^e^gr^e^e^d^a^y^s^*
^Ho^u^s^eh^o^l^d^s^w^ithⁱⁿ^co^m^e#
^B^L^{S lo}^w^e^r^livⁱⁿ^g^stan^d^a^r^d
^O^p^tⁱ^o^{n 4}^:^Fund^{s suffi}^cⁱ^eⁿ^t^fo^r^a
^mⁱⁿⁱ^m^u^m^ben^e^fⁱ^t^of^{$120 per}
^A^F^D^C^-^an^d/^{or F}^{ood S}^t^am^p-
^recipien^{t h}^o^u^s^eh^old
^Source:^T^h^{e C}^r^u^d^{e O}ⁱ^l^Wiⁿ^d^f^a^l^l^Profⁱ^t^s^T^a^x^A^c^t⁽^P^.^L^.⁹⁶^-^{223) an}^{d t}^h^{e H}^o^u^s^{e A}^ppropri^a^tⁱ^oⁿ^s
^C^o^m^mⁱ^t^t^{ee R}^e^port^t^o^A^ccom^p^an^y^H^.^R^.^7998,^t^h^e^F^Y¹⁹⁸¹^D^e^part^m^eⁿ^t^s^of^L^a^{bor, H}^eal^t^h^an^{d H}^u^m^aⁿ
^Serv^ices^{, an}^{d Edu}^cation^A^ppropriation^s^B^{ill, H.R}^e^{pt. 96-}^{1244, A}^ugust²¹^,^1980.
^*^Mu^ltip^lied^b^y^.
#^L^e^{ss th}^an^o^r^eq^u^a^{l to}^.
^a^.^H^.^R^e^p^t^.^96-¹²⁴⁴^di^{d n}^o^t^s^p^e^cⁱ^f^y^w^hⁱ^c^h^y^e^a^r^s^w^o^u^l^d^b^e^u^s^e^d^t^o^d^e^t^e^r^mⁱⁿ^e^r^e^sⁱ^d^eⁿ^tⁱ^a^l^eⁿ^e^r^g^y
^ex^pen^dⁱ^t^u^res^;^{1978 an}^{d 1980 w}^e^{re t}^h^{e y}^ears^u^s^{ed by}^H^H^S^.
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. Some of the changes to the program included
less restrictive federal rules and more state flexibility in determining how to operate
their LIHEAP programs. 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.

Continued Use of the LIEAP Formula
When the formula for LIEAP was initially created in 1980 under the Crude Oil
Windfall Profits Tax Act (P.L. 96-223), it brought about a good deal of debate on the
floor of the Senate, where the formula provisions were added to the legislation.²⁸
Discussion over the formula also occurred leading up to the enactment of P.L. 96-
369, the FY1981 continuing resolution that funded LIEAP and amended the
formula.²⁹ Despite these earlier disagreements over formula allocations, the process
to enact LIHEAP in 1981 did not engender the same level of debate or result in a
different formula. Instead, the law creating LIHEAP 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. From FY1982 through FY1984,
then, states continued to receive the same proportion of funds that they received
under the LIEAP formula.
The 1984 LIHEAP Reauthorization: A New Formula
Formula Discussions. When Congress began to consider reauthorizing
LIHEAP in 1983, two aspects of the formula were debated. First, legislators
recognized that the multi-step LIEAP formula benefitted cold-weather states relative
to warm-weather states.³⁰ This was due to the heating degree day variable and the
fact that residential energy costs of all households (instead of just low-income
households) were used under the various LIEAP formulas. The second debated
aspect of the formula centered on 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.³¹ For example, the most recent
data the formula used were the change in the cost of energy between 1978 and 1980,
or the cost of energy in 1980, depending on the sub-formula one chose to apply. No
aspect of the formula took account of increased costs after 1980.³²
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

²⁸ See, for example, Senate debate, Congressional Record, vol. 125, parts 24-25 (November

13-15, 1979), pp. 32082-32086, 32275-32293, 32558-32565.

²⁹ House debate, Congressional Record, vol. 126, part 18 (August 27, 1980), pp. 23502-

23515.

³⁰ See, for example, Comments of Rep. Billy Tauzin, Joint Hearing before the
Subcommittees on Energy and Commerce, Education and Labor, and Ways and Means, 98^th^st
Cong., 1 sess., February 24, 1983, pp. 119-120.
³¹ Report of the Committee on Energy and Commerce to accompany H.R. 2439, the Low-
Income Home Energy Assistance Amendments of 1984, 98^th Cong., 2^nd sess., H.Rept. 98-

139, Part 2, May 15, 1984, p. 13.

³² Ibid., p. 4.

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.³³ The
amendment was eventually dropped from H.R. 3520 in conference with the Senate.
Introduction of a Hold-Harmless Level. Efforts to reauthorize LIHEAP
had begun in April 1983 with the introduction of 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.” 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.³⁴ 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 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.
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, 1984.³⁵ The Senate bill contained language very similar to H.R. 2439, but
made several changes and additions to the formula.

³³ Congressional Record, vol. 129, part 17 (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%.
³⁴ “The Low-Income Home Energy Assistance Program: An Analysis of the 1984
Reauthorization Issues,” Coalition of Northeastern Governors, April 1984, p. 9.
³⁵ The final version of S. 2565 can be found in the Congressional Record, daily edition, vol.

130 (October 4, 1984), p. S13393.

^!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
were 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 were 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.³⁶ 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, the Human
Services Reauthorization Act, on October 30, 1984.
LIHEAP Formula Statutory Language. Unlike the allocation formulas
under LIEAP and the other energy assistance programs that preceded LIHEAP, which
dictated the use of specific variables to determine allotments to the states, the
LIHEAP formula as drafted by Congress gives more general guidance to HHS. The
LIHEAP statute, as enacted in P.L. 98-558 and codified at 42 U.S.C. §8623(a)(2)
provides as follows.
(A) a State’s allotment percentage is the percentage which expenditures for home
energy by low-income households in that State bears to such expenditures in all
States, except that States which thereby receive the greatest proportional increase
in allotments by reason of the application of this paragraph from the amount they
received pursuant to Public Law 98 — 139 [the FY1984 appropriation] shall
have their allotments reduced to the extent necessary to ensure that —
(i) no State for fiscal year 1985 shall receive less than the amount of funds
the State received in fiscal year 1984; and

³⁶ Congressional Record, daily edition, vol. 130 (October 4, 1984), pp. S13415-S13416.

(ii) no State for fiscal year 1986 and thereafter shall receive less than the
amount of funds the State would have received in fiscal year 1984 if the
appropriations for this subchapter for fiscal year 1984 had been
$1,975,000,000, and
(B) any State whose allotment percentage out of funds available to States from
a total appropriation of $2,250,000,000 would be less than 1 percent, shall not,
in any year when total appropriations equal or exceed $2,250,000,000, have its
allotment percentage reduced from the percentage it would receive from a total
appropriation of $2,140,000,000.
The next section of this report describes how funds are allocated to the states
according to this statutory language.
Determining LIHEAP Regular Fund Allotments
Using the “New” Formula
Current law as enacted in P.L. 98-558, sometimes referred to as the “new”
LIHEAP formula, provides for three different methods to calculate each state’s
allotment of regular LIHEAP funds. The calculation method used to determine state
allotments depends upon the size of the appropriation for that fiscal year. If the
annual appropriation level does not exceed the equivalent of a hypothetical FY1984
appropriation of $1.975 billion, then the allocation rates under the “old” LIHEAP
formula apply. This is sometimes referred to as “Tier I” of the LIHEAP formula. If
appropriations exceed a hypothetical FY1984 appropriation of $1.975 billion, then
new formula rates apply and are used to calculate state allotments. To calculate the
new formula rates, the most recent data available are used to determine the heating
and cooling costs of low-income households. When appropriations exceed the
$1.975 billion level, but are less than $2.25 billion, the new formula rates are used
together with the hold-harmless level. This is sometimes referred to as “Tier II” of
the LIHEAP formula. Finally, if appropriations equal or exceed $2.25 billion, the
new rates apply and both the hold-harmless level together with the hold-harmless rate
are in effect. This is sometimes referred to as “Tier III” of the LIHEAP formula.
This section describes the steps involved in allocating LIHEAP funds to the states
under the three tiers of the formula.
Calculating the New Formula Rates
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 under the LIEAP formula
did not use the most current data available.³⁷ For example, the formula used the
change in cost of energy between 1978 and 1980, but did not take account of

³⁷ Report of the Committee on Energy and Commerce to accompany H.R. 2439, the Low-
Income Home Energy Amendments of 1984, 98^th Cong., 2^nd sess., H.Rept. 98-139, Part 2,
May 15, 1984, p. 13.

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. The LIHEAP formula as
created by P.L. 98-558 requires HHS to use the most recent data available. HHS
updates these data periodically. The most recent data were provided to CRS in
September of 2008.
As directed by the statute as enacted in 1984, the LIHEAP formula uses the
home energy expenditures of low-income households in each state as a first step in
determining the proportion of total regular funds that each state will receive.³⁸
Specifically, this means estimating the amount of money that all low-income
households (as defined by the LIHEAP statute³⁹) in each state spend on heating and
cooling from all energy sources. This method 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 process for capturing
the expenditures of low-income households for the most current year possible
involves the following steps.
^!Total Residential Energy Consumption. The first step in
calculating new formula rates is determining total residential energy
consumption for each heating and cooling source in every state.
Residential energy consumption is usually measured in terms of the
total amount of British Thermal Units (Btus) used in private
households and generally captures energy used for space and water
heating, cooling, lighting, refrigeration, cooking, and the energy
needed to operate appliances. The most recent data used in
calculating LIHEAP formula rates come from the 2004 Energy
Information Administration (EIA) State Energy Data System
consumption estimates.
^!Temperature Variation. The next step in determining the formula
rates involves adjusting the amount of energy consumed for each
fuel source by temperature variation in each state. This is done by
using a ratio consisting of the 30-year average heating and cooling
degree day data to each state’s share of the most recent year’s
average heating and cooling degree days. 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.⁴⁰ For example, a day
with an average temperature of 50°F results in a measure of 15
heating degree days; a day with an average temperature of 80°F

³⁸ “[A] State’s allotment percentage is the percentage which expenditures for home energy
by low-income households in that State bears to such expenditures in all States...” 42 U.S.C.
§8623(a)(2).
³⁹ The LIHEAP statute considers households with income at or below 150% of poverty or

60% of state median income (whichever value is greater) to be low income. 42 U.S.C.

§8624(b)(2)(B).
⁴⁰ A state’s heating and cooling degree data are weighted by population in the state.

results in a measure of 15 cooling degree days. The purpose of the
adjustment to fuel consumption is to account for abnormally warm
or cool years, where energy usage might attain extreme values. This
information is collected by the National Oceanic and Atmospheric
Administration. The most recent year’s average heating and cooling
degree day data are from 2006, and the 30-year average was
computed from 1971 to 2000.
^!Heating and Cooling Consumption. As mentioned above, total
residential energy consumption encompasses other uses in addition
to heating and cooling (e.g. operation of appliances). So the next
step in calculating LIHEAP formula rates is to derive the portion of
fuel consumed specifically to heat and cool homes as opposed to
other uses. The EIA, as part of the Residential Energy Consumption
Survey (RECS), uses an “end use estimation methodology” to
estimate the amount of fuel used for heating and cooling (among
other uses). The most recent information on heating and cooling
consumption comes from the 2001 RECS, adjusted for 2003.⁴¹
^!Low-Income Household Heating and Cooling Consumption.
After estimating heating and cooling consumption for all
households, the next step is to calculate heating and cooling
consumption in Btus for low-income households. The Bureau of the
Census, Department of Commerce, prepares a special sample for
HHS of the fuel sources used by low-income households. The most
recent information on low-income households and the fuel sources
they use comes from the 2000 Census. In addition, low-income
consumption data are adjusted to account for the fact that low-
income households might use more or less of a fuel source than is
used by households on average. This is done using consumption
data from the 2001 RECS adjusted for 2003.
^!Total Spending on Heating and Cooling. To arrive at the amount
of money that low-income households spend on heating and cooling,
the number of Btus used by low-income households that were
estimated in the previous step are multiplied by the average fuel
price for each fuel source. The total amount spent on heating and
cooling by low-income households for each fuel source is then
added together to arrive at total spending for each state. Regional
energy price variation can be significant, and the formula takes
expected expenditure differences into account. This information is
collected by the EIA and published in the State Energy Data System
Consumption, Price, and Expenditure Estimates.⁴² The most recent
price data used to calculate formula rates are from 2004.

⁴¹ For more information about the RECS, see the EIA website at [http://www.eia.doe.gov/
emeu/recs/].
⁴² The EIA’s state data tables are available at [http://www.eia.doe.gov/emeu/states/
_seds.html].

^!New Formula Rate. Finally, these expenditure data are used to
estimate the amount spent by low-income households on heating and
cooling in each state relative to the amount spent by low-income
households on heating and cooling in all states. The calculated
proportion becomes the new formula percentage, or rate, for each
state. See Table 3 at the end of this section for both old and new
LIHEAP formula rates. Column (a) shows the rates under the “old”
formula, while column (b) shows the most recent “new” formula
rates.
These new formula rates are used to allocate LIHEAP funds to the states if the
annual appropriation exceeds the equivalent of a hypothetical FY1984 appropriation
of $1.975 billion. However, these new formula rates do not represent the exact
proportion of funds that states will receive under the new formula. The ultimate
allotments are determined after application of the both the hold-harmless level and
hold-harmless rate, described in the next section. The new rates are the starting point
for determining how funds will be allocated to the states.
Using the New Formula Rates to Allocate Funds to the States
The LIHEAP new formula rates that HHS calculates using the most current data
available do not necessarily represent the proportion of funds that states will receive.
State allotments depend upon the application of the two hold-harmless provisions in
the LIHEAP statute. Some states must have their share of funds ratably reduced in
order to hold harmless those states that would, but for the hold-harmless provisions,
lose funds. Other states see a gain in their share of funds because they benefit from
the hold-harmless provisions. The application of the hold-harmless provisions
depends upon the size of the appropriation for a given fiscal year. These
appropriation level triggers are described below.
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, states receive the same percentage of funds
that they would have received at that appropriation level under the “old” LIHEAP⁴³
formula. This FY1984 appropriation of $1.975 billion referred to in the LIHEAP
statute is hypothetical because this was not the amount actually appropriated in
FY1984. The actual FY1984 appropriation was $2.075 billion. In addition, the
current year appropriation that is “equivalent to” a hypothetical FY1984
appropriation of $1.975 billion is not exactly $1.975 billion. In FY1984, with the
exception of funds provided to the territories, all LIHEAP regular funds were
distributed to the states. Since then, two other funds have become part of the regular
fund distribution. These are funds for training and technical assistance and for the

⁴³ It is important to understand, however, 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. See
U.S. Department of Health and Human Services, Low Income Home Energy Assistance
Program: Report to Congress for FY1987, p. 133.

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 new funds. Assuming that funds for
leveraging incentive/REACH grants is $27 million and training and technical
assistance is $300,000 (the amounts allocated to these funds in FY2009), then the
equivalent of an FY1984 appropriation of $1.975 billion is approximately $2.0023
billion.⁴⁴
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). Table 3, at the end of this section of
the report, shows rates under the old formula in column (a). For example, at an
appropriation at or below the equivalent of a hypothetical FY1984 appropriation of
$1.975 billion, Alabama would receive 0.86% of total funds, Alaska would receive
0.55% of total funds, and so on. Appendix A, Table A-1, column (a) reports the
dollar amount of funds that each state would have received in FY1984 had the
regular fund appropriation been $1.975 billion.
Tier II: From $1.975 Billion up to $2.25 Billion. If the regular LIHEAP
appropriation exceeds a hypothetical FY1984 appropriation of $1.975 billion for the
fiscal year, all funds are to be distributed under a different methodology, using the
new set of rates described earlier. In addition, a hold-harmless level applies to ensure
that certain states do not fall below the amount of funds they would have received at
the equivalent of a hypothetical FY1984 appropriation of $1.975 billion. Table 3,
at the end of this section, shows whether a state benefits from the hold-harmless
level. This is indicated by a “Y” in column (c), while the dollar amount of funds
those states receive by being held harmless appears in column (d). For example,
Alabama is not held harmless, while Alaska is held harmless. The dollar amount of
funds that Alaska receives pursuant to the hold-harmless level is $10.828 million.
But for the hold-harmless level, Alaska would receive less than this dollar amount
at its new formula rate at certain appropriation levels. Eventually, when
appropriations increase sufficiently, the allotments for states that are held harmless
with exceed their hold harmless amounts. This appropriation level varies for each
state.
The hold-harmless level is achieved by reducing the allocation of funds to those
states with the greatest proportional gains under the new formula rates.⁴⁵ For
example, under the most recent LIHEAP formula rates, states with the greatest
proportional gains were Nevada, Texas, and Florida. Depending on the appropriation
level, these states (and others with the greatest gains) may then have their allotments
reduced to hold harmless those states that would otherwise see reduced benefits. So
although these states with the greatest proportional gains will see their LIHEAP

⁴⁴ This amount is arrived at by adding $27 million and $300,000 to $1.975 billion.
⁴⁵ “States which thereby receive the greatest proportional increase in allotments ... shall have
their allotments reduced to the extent necessary to ensure that ... no State for fiscal year
1986 and thereafter shall receive less than the amount of funds the State would have
received in fiscal year 1984 ...” 42 U.S.C. §8623(a)(2)(A)(ii).

allotments increase under the new formula, their allotments may not increase to reach
their new formula rates (column (b) of Table 3).
Columns (b) and (c) of Table A-1 in Appendix A show estimated allotments
to the states at hypothetical appropriations levels under Tier II of the LIHEAP
formula. Column (b) shows the estimated allotment of funds that each state would
receive when the regular fund appropriation is at $2.14 billion and column (c) shows
the estimated allotment of funds when the regular fund appropriation is just under
$2.25 billion ($2,249,999,999).
Tier III: At or Above $2.25 Billion. The LIHEAP statute stipulates
additional requirements in the method for distributing funds when the appropriation
is at or above $2.25 billion. 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 the⁴⁶
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.) Then that state will
receive the $2.14 billion allotment proportion for all appropriation levels at or above
$2.25 billion. This hold-harmless rate ensures a state specific share of the total
available funds.
As with the Tier II funding level, the allocations to the states with the greatest
proportional gains are then ratably reduced again, using the methodology described
in the Tier II discussion, until there is no funding shortfall. Column (e) of Table 3
shows which states benefit from the hold-harmless rate, indicated by a “Y,” while
column (f) shows the proportion of funds that those states receive. For example,
Alaska benefits from the hold-harmless rate and receives 0.513% of the total
appropriation when appropriations are at or above $2.25 billion.
The application of the hold-harmless rate creates another layer of discontinuity
in the allocation rates. Columns (d) through (h) of Table A-1 in Appendix A show
estimated allotments to states at various hypothetical appropriations levels above at
or above $2.25 billion. Column (d) shows 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. Columns (e) through (h) show the estimated allotment each
state would receive at $2.5 billion, $3.0 billion, $4.0 billion, and $5.1 billion.

⁴⁶ “[A]ny State whose allotment percentage out of funds available to States from a total
appropriation of $2,250,000,000 would be less than 1 percent, shall not, in any year when
total appropriations equal or exceed $2,250,000,000, have its allotment percentage reduced
from the percentage it would receive from a total appropriation of $2,140,000,000.” 42
U.S.C. §8623(a)(2)(B).

Implementation of the “New” LIHEAP Formula
Until FY2006, appropriations for regular LIHEAP funds had only exceeded the
equivalent of a hypothetical FY1984 appropriation of $1.975 billion in 1985 and
1986; therefore, from FY1987 through FY2005, and again in FY2007, states
continued to receive the same percentage of LIHEAP funds that they received under
the program’s predecessor, LIEAP (see column (a) of Table 3 for these proportions).
In FY2006, funds were distributed under the “new” LIHEAP formula when Congress
appropriated $2.48 billion in regular funds for the program. In FY2008, perhaps due
to an oversight, the new formula was again used to distribute funds. The FY2008
Consolidated Appropriations Act (P.L. 110-161) failed to authorize a set-aside called
leveraging incentive grants. As a result, the funds for those grants were added to the
LIHEAP regular funds, triggering the new formula.⁴⁷ In FY2009, the Consolidated
Security, Disaster Assistance, and Continuing Appropriations Act (P.L. 110-329)
appropriated $4.51 billion in regular funds. However, the law further specified that
$840 million be distributed according to the “new” LIHEAP formula, with the
remaining $3.67 billion distributed according to the proportions of the “old” formula
established by LIEAP. See Table C-1 in Appendix C of this report for the
distribution of funds to the states in FY2006 through FY2009.

⁴⁷ For more information about this issue, see Appendix C of this report.

Table 3. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Rates by State, 2008
^Hol^d^-Harm^l^es^s^L^e^vel^H^ol^d^-^Harm^l^e^s^s^R^a^te
^Subj^ect^t^o^Hol^d^-^Subj^ect^t^o
^“Ol^d^”^“N^ew^”^Hol^d^-^Harm^l^e^s^s^Hol^d^-^Hol^d^-
^Allo^t^m^ent^Allo^t^m^ent^Harm^l^e^s^s^Le^v^e^l^Harm^l^e^s^s^Harm^l^e^s^s
^{Rate (%)}^Ra^{te (%)}^Le^v^e^l?⁽^$^M^illio^ns)^Ra^te?^Ra^{te (%)}
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)^(f)
^A^l^abam^a⁰^.860^1.650^N^—^N^—
^A^l^as^k^a^0.549^0.317^Y^10.828^Y⁰^.513
^A^rⁱ^z^on^a⁰^.416^0.813^N^—^N^—
^A^r^k^aⁿ^s^as^0.656^0.910^N^—^N^—
^C^a^lⁱ^f^ornⁱ^a⁴^.614^5.303^N^—^N^—
^C^o^l^o^rado^1.609^1.305^Y^31.729^N^—
^C^oⁿⁿ^ectⁱ^c^u^t^2.099^2.164^N^—^N^—
^D^e^l^a^w^a^re^0.279^0.453^N^—^N^—
^Dⁱ^s^t^ri^ct^of^C^o^l^u^m^bⁱ^a^0.326^0.328^N^—^N^—
^F^l^ori^d^a¹^.361^3.781^N^—^N^—
^G^e^orgⁱ^a¹^.076^2.734^N^—^N^—
^H^a^w^aⁱⁱ^0.108^0.099^Y²^.137^Y⁰^.101
^Idah^o⁰^.628^0.331^Y^12.376^Y⁰^.587
^Illin^ois⁵^.809^4.998^Y^114.565^N^—
^In^di^an^a²^.630^2.128^Y^51.872^N^—
^Iow^a^1.864^1.064^Y^36.762^N^—
^K^aⁿ^s^as^0.856^1.106^N^—^N^—
^K^eⁿ^t^u^c^k^y^1.369^1.621^N^—^N^—
^L^o^uⁱ^sⁱ^an^a⁰^.879^1.514^N^—^N^—
^Maiⁿ^e¹^.360^0.908^Y^26.815^N^—
^Mary^l^aⁿ^d^1.607^2.652^N^—^N^—
^Mas^s^ach^u^s^et^t^s^4.198^3.311^Y^82.797^N^—
^Mi^chⁱ^g^an^5.515^4.645^Y^108.770^N^—
^Miⁿⁿ^e^s^o^t^a^3.973^1.917^Y^78.363^N^—
^Mi^s^sⁱ^s^sⁱ^ppi^0.737^0.951^N^—^N^—
^Mi^s^s^o^u^rⁱ²^.320^2.309^Y^45.762^N^—
^Mon^t^an^a⁰^.736^0.441^Y^14.517^Y⁰^.688
^N^e^bras^k^a^0.922^0.558^Y^18.180^Y⁰^.862
^N^e^v^a^da^0.195^0.576^N^—^N^—
^N^e^w^H^a^m^p^s^hⁱ^r^e⁰^.795^0.503^Y^15.672^Y⁰^.743
^N^e^w^Jers^ey^3.897^3.621^Y^76.865^N^—
^N^e^w^Mexⁱ^co^0.521^0.577^N^—^N^—
^N^e^w^Y^o^rk^12.725^9.393^Y^250.974^N^—
^N^o^rt^h^C^a^rolⁱⁿ^a¹^.896^3.261^N^—^N^—
^N^o^rt^h^D^a^k^o^t^a^0.800^0.273^Y^15.770^Y⁰^.748
^O^hⁱ^o^5.139^4.803^Y^101.350^N^—
^O^k^l^a^h^o^m^a^0.791^1.275^N^—^N^—
^O^r^eg^on^1.247^0.750^Y^24.591^N^—
^Penⁿ^s^y^l^v^aⁿⁱ^a⁶^.835^5.731^Y^134.810^N^—
^R^h^{ode Is}^l^aⁿ^d^0.691^0.665^Y^13.629^N^—
^S^o^u^t^h^C^a^rolⁱⁿ^a⁰^.683^1.349^N^—^N^—
^S^o^u^t^h^D^a^k^o^t^a^0.649^0.235^Y^12.808^Y⁰^.607

^Hol^d^-Harm^l^es^s^L^e^vel^H^ol^d^-^Harm^l^e^s^s^R^a^te
^Subj^ect^t^o^Hol^d^-^Subj^ect^t^o
^“Ol^d^”^“N^ew^”^Hol^d^-^Harm^l^e^s^s^Hol^d^-^Hol^d^-
^Allo^t^m^ent^Allo^t^m^ent^Harm^l^e^s^s^Le^v^e^l^Harm^l^e^s^s^Harm^l^e^s^s
^{Rate (%)}^Ra^{te (%)}^Le^v^e^l?⁽^$^M^illio^ns)^Ra^te?^Ra^{te (%)}
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)^(f)
^T^eⁿⁿ^e^s^s^e^e¹^.386^1.801^N^—^N^—
^T^e^x^a^s²^.264^6.524^N^—^N^—
^U^t^ah^0.748^0.599^Y^14.745^Y⁰^.699
^V^e^rm^on^t⁰^.596^0.319^Y^11.747^Y⁰^.557
^Vⁱ^rgⁱⁿⁱ^a^1.957^3.041^N^—^N^—
^Was^hⁱⁿ^g^t^on^2.051^1.204^Y^40.450^N^—
^Wes^t^Vⁱ^rgⁱⁿⁱ^a^0.906^0.907^N^—^N^—
^Wi^s^c^on^sⁱⁿ³^.576^2.080^Y^70.538^N^—
^Wy^omⁱⁿ^g⁰^.299^0.202^Y^5.903^Y⁰^.280
^Source:^C^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^{) calcu}^lation^s^bas^e^{d on}^f^actors^prov^id^e^d^b^y^th^e
^D^e^part^m^eⁿ^t^of^H^eal^t^h^an^{d H}^u^m^aⁿ^S^e^rvⁱ^ces^(H^H^S^{) i}ⁿ^S^e^pt^em^{ber 2008.}
^No^te:^T^h^{e actu}^a^{l proportion}^of^total^reg^u^l^ar^f^uⁿ^d^s^each^s^t^{ate receiv}^e^s^{at f}^uⁿ^dⁱⁿ^g^lev^e^ls^abov^{e $1.975}
^b^illioⁿ^m^a^y^dⁱ^f^f^e^r^su^b^s^tan^tially^f^r^o^m^th^{e calcu}^latedⁿ^e^w^f^o^r^m^u^l^{a r}^a^{te d}^u^{e to}^th^{e h}^o^ld^-^h^ar^m^l^ess
^p^r^o^v^isioⁿ^s^an^d^th^{e r}^a^tab^l^{e r}^e^d^u^ctioⁿ^s^to^co^v^e^r^sh^o^r^tf^{all f}^r^o^m^th^{ese h}^o^ld^-^h^ar^m^l^{ess p}^r^o^v^isioⁿ^s^.

Appendix A: Estimated Appropriations to the States
Under Various Hypothetical Appropriation Levels
Table A-1, below, shows estimated allocations to the states at various
hypothetical appropriations levels. In column (a) are allotments at the equivalent of
a hypothetical FY1984 appropriation of $1.975 billion — under current LIHEAP
practice where funds are set aside for leveraging incentive grants and training and
technical assistance, the equivalent appropriation level is approximately $2.0023
billion. The remaining columns show estimated allotments at appropriations of $2.14
billion, just under $2.25 billion, $2.25 billion, $3.0 billion, $4.0 billion, and $5.1
billion, the amount at which the LIHEAP program was last authorized in P.L. 109-58.

Table A-1. LIHEAP Estimated State Allotments for Regular Funds
at Various Hypothetical Appropriation Levels
($ in millions)
^Tⁱ^{er I}^T^{ier I}^I^Tⁱ^{er I}^I^I
^Hyp^o^th^eti^c^al
^{$1.975 B}^illion^J^u^st^under
ⁱⁿ^FY¹⁹⁸⁴^$²^.¹⁴^B^illioⁿ^$²^.²⁵^B^illioⁿ^$²^.²⁵^B^illioⁿ^$²^.⁵^B^illioⁿ^$³^.⁰^B^illioⁿ^$⁴^.⁰^B^illioⁿ^$⁵^.¹^B^illioⁿ
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)^(f)^(g)^(h⁾
^A^l^abam^a^16.963^21.677^26.014^25.613^34.432^48.984^65.463^83.588
^Al^a^s^k^a^10.828^10.828^10.828^11.392^12.673^15.235^20.360^25.998
^A^rⁱ^z^on^a⁸^.203^10.483^12.580^12.387^16.652^24.142^32.264^41.197
^A^r^k^aⁿ^s^as^12.943^16.541^19.850^19.544^22.461^27.003^36.087^46.079
^C^a^lⁱ^f^ornⁱ^a^91.001^111.879^117.704^117.704^130.942^157.420^210.375^268.626
^C^o^l^o^rado^31.729^31.729^31.729^31.729^32.226^38.742^51.774^66.110
^C^oⁿⁿ^ectⁱ^c^u^t^41.392^45.660^48.037^48.037^53.440^64.246^85.859^109.632
ⁱ^{ki/CRS-RL33275}^D^e^l^a^w^a^re^5.494^7.021^8.425^8.296^11.152^13.461^17.989^22.969
^g/w^Dⁱ^s^t^ri^ct^of^C^o^l^u^m^bⁱ^a^6.428^6.924^7.285^7.285^8.104^9.743^13.020^16.625
^s^.or^F^l^ori^d^a^26.840^34.300^41.161^40.527^54.481^79.847^121.835^156.397
^le^ak
^G^e^orgⁱ^a^21.221^27.119^32.544^32.043^43.076^63.131^96.330^123.655
^://wiki^H^a^w^aⁱⁱ^2.137^2.137^2.201^2.248^2.501^3.007^4.019^5.131
^h^ttp^Idah^o^12.376^12.376^12.376^13.021^14.485^17.415^23.273^29.717
^Illin^ois^114.565^114.⁵⁶⁵^114.565^114.565^123.428^148.386^198.302^253.210
^In^di^an^a^51.872^51.872^51.872^51.872^52.542^63.166^84.415^107.788
^Iow^a^36.762^36.762^36.762^36.762^36.762^36.762^42.208^53.895
^K^aⁿ^s^as^16.883^21.575^24.554^24.554^27.315^32.839^43.885^56.037
^K^eⁿ^t^u^c^k^y^26.994^34.197^35.977^35.977^40.024^48.117^64.303^82.108
^L^o^uⁱ^sⁱ^an^a^17.342^22.162^26.595^26.185^35.201^44.941^60.059^76.689
^Main^e^26.815^26.815^26.815^26.815^26.815^26.965^36.036^46.015
^Mary^l^aⁿ^d^31.693^40.502^48.603^47.855^64.331^78.717^105.198^134.326
^Mas^s^ach^u^s^et^t^s^82.797^82.797^82.⁷⁹⁷^82.797^82.797^98.293^131.358^167.729
^Mi^chⁱ^g^an^108.770^108.770^108.770^108.770^114.704^137.898^184.287^235.314
^Miⁿⁿ^e^s^o^t^a^78.363^78.363^78.363^78.363^78.363^78.363^78.363^97.088
^Mi^s^sⁱ^s^sⁱ^ppi^14.543^18.585^21.109^21.109^23.483^28.231^37.728^48.175
^Mi^s^s^o^u^rⁱ^45.762^48.714^51.250^51.250^57.014^68.543^91.601^116.964
^Mon^t^an^a^14.517^14.517^14.517^15.273^16.990^20.426^27.297^34.856

^Tⁱ^{er I}^T^{ier I}^I^Tⁱ^{er I}^I^I
^Hyp^o^th^eti^c^al
^{$1.975 B}^illion^J^u^st^under
ⁱⁿ^FY¹⁹⁸⁴^$²^.¹⁴^B^illioⁿ^$²^.²⁵^B^illioⁿ^$²^.²⁵^B^illioⁿ^$²^.⁵^B^illioⁿ^$³^.⁰^B^illioⁿ^$⁴^.⁰^B^illioⁿ^$⁵^.¹^B^illioⁿ
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)^(f)^(g)^(h⁾
^N^e^bras^k^a^18.180^18.180^18.180^19.127^21.278^25.581^34.186^43.652
^N^e^v^a^da^3.853^4.924^5.909^5.818^7.821^11.462^17.489^22.451
^N^e^w^H^a^m^p^s^hⁱ^r^e^15.672^15.672^15.672^16.488^18.342^22.051^29.469^37.629
^N^e^w^Jers^ey^76.865^76.865^80.379^80.379^89.419^107.501^143.663^183.442
^N^e^w^Mexⁱ^co^10.270^12.182^12.816^12.816^14.257^17.140^22.906^29.249
^N^e^w^Y^o^rk^250.974^250.974^250.974^250.974^250.974^278.838^372.637^475.817
^N^o^rt^h^C^a^rolⁱⁿ^a^37.403^47.798^57.359^56.476^75.921^96.804^129.368^165.189
^N^o^rt^h^D^a^k^o^t^a^15.770^15.770^15.770^16.591^18.457^22.189^29.653^37.864
^O^hⁱ^o^101.350^101.350^106.614^106.⁶¹⁴^118.605^142.588^190.554^243.316
^O^k^l^a^h^o^m^a^15.592^19.926^23.912^23.544^31.486^37.853^50.586^64.593
^O^r^eg^on^24.591^24.591^24.591^24.591^24.591^24.591^29.762^38.002
ⁱ^{ki/CRS-RL33275}^Penⁿ^s^y^l^v^aⁿⁱ^a^134.810^134.810^134.⁸¹⁰^134.810^141.520^170.137^227.370^290.326
^g/w^R^h^{ode Is}^l^aⁿ^d^13.629^14.037^14.⁷⁶⁷^14.767^16.428^19.750^26.394^33.702
^s^.or^S^o^u^t^h^C^a^rolⁱⁿ^a^13.472^17.216^20.660^20.342^27.346^40.049^53.522^68.341
^le^ak^S^o^u^t^h^D^a^k^o^t^a^12.808^12.808^12.808^13.475^14.990^18.021^24.084^30.752
^://wiki^T^eⁿⁿ^e^s^s^e^e^27.344^34.944^39.984^39.984^44.481^53.475^71.464^91.252^T^e^x^a^s^44.653^57.064^68.479^67.424^90.638^132.838^202.694^260.192
^h^ttp^U^t^ah^14.745^14.745^14.745^15.512^17.257^20.747^27.726^35.403
^V^e^rm^on^t^11.747^11.747^11.747^12.358^13.748^16.528^22.088^28.204
^Vⁱ^rgⁱⁿⁱ^a^38.606^49.336^59.204^58.293^75.098^90.283^120.654^154.061
^Was^hⁱⁿ^g^t^on^40.450^40.450^40.450^40.450^40.450^40.450^47.756^60.979
^Wes^t^Vⁱ^rgⁱⁿⁱ^a^17.864^19.140^20.¹³⁶^20.136^22.401^26.931^35.990^45.956
^Wi^s^c^on^sⁱⁿ^70.538^70.538^70.538^70.538^70.538^70.538^82.519^105.367
^Wy^omⁱⁿ^g⁵^.903^5.903^5.903^6.211^6.909^8.306^11.101^14.174
^T^o^t^a^l¹^,972.33^2,109.839^2,219.690^2,219.⁶⁹⁰^2,469.351^2,968.674^3,967.320^5,065.830
^Source:^C^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^{) calcu}^lation^s^bas^e^{d on}^f^act^ors^provⁱ^d^{ed by}^t^h^{e D}^e^part^m^eⁿ^t^of^H^eal^t^h^an^{d H}^u^m^aⁿ^S^e^rvⁱ^ces^(H^H^S^{) i}ⁿ^S^e^pt^em^{ber 2008.}
^No^tes:^T^h^es^{e es}^tim^ates^tak^eⁱⁿ^{to accou}ⁿ^t^cu^rren^t^law^,^w^h^ich^allow^s^HHS^to^s^e^t^as^ide^f^uⁿ^d^s^ou^{t of}^reg^u^l^{ar L}^I^HEA^P^f^uⁿ^d^s^f^o^{r territorie}^{s, lev}^e^r^a^g^eⁱⁿ^cen^tiv^{e g}^r^an^{ts an}^d
^R^e^sⁱ^den^tial^En^erg^y^A^s^sⁱ^s^t^an^ce^C^h^allen^g^e^(R^EA^C^H⁾^g^r^an^ts^an^{d train}ⁱⁿ^g^an^{d tech}ⁿⁱ^{cal as}^sⁱ^s^t^an^{ce. For each}^es^tim^ate,^approx^im^ately⁰^.¹⁴^%^{is allo}^cated^to^th^{e ter}^r^ito^rⁱ^es,
^{$27 m}^illion^{to lev}^e^ragⁱⁿ^gⁱⁿ^cen^tiv^{e an}^{d R}^E^A^C^{H g}^r^an^ts^{, an}^{d $300,000 to}^trainⁱⁿ^g^an^{d tech}ⁿⁱ^{cal as}^sⁱ^s^t^an^{ce. Dif}^f^e^rin^g^allocation^s^to^lev^e^r^a^gⁱⁿ^gⁱⁿ^cen^tiv^e^an^d^REA^C^H
^g^r^an^ts^cou^l^{d ch}^an^g^e^s^t^{ate allotm}^en^ts^.

Appendix B: 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. Represented are (1) a hold-
harmless level state, (2) a hold-harmless level and rate state, and (3) a state whose
increased allocations are ratably reduced in order to maintain allocations for the hold-
harmless level and rate states.
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
previously in this report. The figure also graphs the three basic types of states.
Reading from top to bottom of Figure 1, these three types of states are as follows.
^!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 3, 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. There is a small decrease in state allotments at
point D that is attributable to the increased shortfall on the
distribution of funds that the hold-harmless rate imposes. In Table
3, 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)
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 3, 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-27
Figure 1. Estimated Low Income Home Energy Assistance (LIHEAP) Allocations at Various Hypothetical Appropriations Level
for Three Types of States

^$12⁰
^Tⁱ^er^I^I^ho^l^d^-^har^m^l^e^s^s
^Ti^e^r^I^le^v^e^l^G
^Tⁱ^e^r^I^I^I^ho^l^d^-^h^ar^m^l^es^s^r^a^t^e
^$10⁰
^H^o^l^d^-^har^m^l^es^s^l^e^v^e^l
^on^l^y^s^t^a^t^e
^$8⁰^H
^F
ⁱ^{ki/CRS-RL33275}^en^t^s⁾^A
^g/w^t^m^ion
^s^.or^$6⁰^l^l^oⁱ^ll^Rat^abl^y^r^edu^c^ed
^le^akⁿ^m^st^a^t^e
^{ate A}⁽^$ⁱ^H^o^l^d^-^har^m^l^es^s^l^e^v^e^l
^://wiki^S^t^{and r}^a^t^e^s^t^at^e
^h^ttp
^$4⁰
^D^I
^$2⁰^B
^C^E
^$0
^$0^$¹^,⁰⁰⁰^$2,⁰⁰⁰^$3^,⁰⁰⁰^$4,⁰⁰⁰^$5,⁰⁰⁰
^A^p^pr^op^rⁱ^a^tⁱ^oⁿ
⁽^$ⁱⁿ^mⁱ^lli^oⁿ^s⁾
^Fig^u^r^e^{created by}^C^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^{) calcu}^latioⁿ^s^u^sⁱⁿ^g^allo^tm^en^t^r^a^tes^p^r^o^v^id^ed^b^y^th^{e Dep}^a^r^t^m^eⁿ^t^o^f^Healt^h^an^{d H}^u^m^aⁿ^S^e^rvⁱ^cesⁱⁿ^S^e^pt^em^{ber 2008.}

Appendix C: Actual LIHEAP Allocations
to the States, FY2006-FY2009
In the most recent regular fund appropriation for LIHEAP, the FY2009
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act (P.L.
110-329), Congress appropriated $4.51 billion. However, of that amount, $840
million was to be distributed according to the “new” formula and the remainder
under the “old” formula proportions. Column (e) of Table C-1 shows the amount
of regular funds that each state received under P.L. 110-329.
In the FY2008 Consolidated Appropriations Act (P.L. 110-161), Congress
appropriated $1.98 billion in LIHEAP regular funds.⁴⁸ The first distribution to the
states of the regular funds appropriated in P.L. 110-161 occurred in December 2007;
allocations were made on the basis of the proportions of the “old” LIHEAP formula.
The amount of funds that each state received under this allotment is in column (c) of
Table C-1. Then, on June 26, 2008, HHS announced that it would distribute funds
that were thought to have been allocated to leveraging incentive and REACH grants
in the FY2008 Appropriations Act as part of the regular fund formula grants. Since
the early 1990s, leveraging incentive and REACH grants have been made to states
and tribes on the basis of their ability to obtain non-LIHEAP resources for energy
assistance (leveraging incentive grants) and for increasing energy efficiency of low-
income households (REACH grants). In recent years, Congress has allocated about
$27 million for these two funds. However, in FY2008, P.L. 110-161 did not
appropriate funds for leveraging incentive and REACH grants. When HHS
discovered that language to appropriate the funds was missing from the law, it
released the $26.7 million that would otherwise have been distributed as leveraging
incentive and REACH grants as part of the LIHEAP formula distribution. The
addition of nearly $27 million to the formula grants caused the funds to be released
under the “new” LIHEAP formula. Column (d) of Table C-1 shows the total amount
of funds that each state received after $26.7 million was added and funds were
distributed under the new formula.
Column (b) of Table C-1 shows the amounts allocated to the states in FY2007
when Congress appropriated $1.98 billion in regular LIHEAP funds as part of a
year-long continuing resolution (P.L. 110-5). Funds were distributed according to
the proportions of the old formula. Column (a) shows the amount allotted to each
state in FY2006, when $2.48 billion was appropriated for LIHEAP regular funds
through two different laws. The FY2006 Departments of Labor, Health and Human
Services, and Education Appropriations Act (P.L. 109-149) appropriated $1.98
billion for LIHEAP and a bill to make available funds in the Deficit Reduction Act
of 2005 for LIHEAP (P.L. 109-204) appropriated $500 million.

⁴⁸ P.L. 110-161 contained an across-the-board rescission of 1.747% that reduced the stated
amounts appropriated for most Departments of Labor, Health and Human Services, and
Education programs. See Division G, Section 528 of P.L. 110-161. The $1.98 billion
appropriation for regular funds was the amount available after this rescission.

Table C-1. LIHEAP Actual State Regular Fund Allotments for
FY2006 through FY2009
⁽^$ⁱⁿ^m^illioⁿ^s⁾
^FY²⁰⁰⁸^FY²⁰⁰⁸
^Allo^t^m^ent^s^Allo^t^m^ent^s
^FY²⁰⁰⁶^FY²⁰⁰⁷^{Prior to}^After
^Al^l^o^tm^en^ts^:^A^l^l^o^tm^en^ts^:^6-26-08:^6-26-08:^FY²⁰⁰⁹
^$2.48^a^$1.98^b^$1.98^c^$1.98^d^Al^l^o^tm^en^ts^:^e
^billioⁿ^billioⁿ^billioⁿ^billioⁿ^$⁴^.⁵^billioⁿ
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)
^A^l^abam^a^31.310^16.769^16.774^{17.111 60.063}
^A^l^as^k^a^12.572^10.704^10.707^{10.828 23.568}
^A^rⁱ^z^on^a^15.142^8.110^8.112^{8.275 29.047}
^A^r^k^aⁿ^s^as^22.765^12.796^12.799^{13.057 36.497}
^C^a^lⁱ^f^ornⁱ^a^153.184^89.963^89.985^{91.797 225.894}
^C^o^l^o^rado^31.729^31.367^31.375^{31.729 63.474}
^C^oⁿⁿ^ectⁱ^c^u^t^47.809^40.920^40.930^{41.754 95.783}
^D^e^l^a^w^a^re^10.141^5.431^5.433^{5.542 17.384}
^Dⁱ^s^t^ri^ct^of^C^o^l^u^m^bⁱ^a^7.852^6.355^6.356^6.484^14.653
^F^l^ori^d^a^49.542^26.534^26.541^{27.075 95.037}
^G^e^orgⁱ^a^39.170^20.979^20.985^{21.407 75.141}
^H^a^w^aⁱⁱ^2.555^2.113^2.113^{2.137 4.652}
^Idah^o^14.370^12.235^12.238^{12.376 26.939}
^Illin^ois^145.959^113.²⁵⁹^113.287^{114.565 237.236}
^In^di^an^a^53.986^51.280^51.293^{51.872 103.609}
^Iow^a^36.762^36.343^36.352^{36.762 67.803}
^K^aⁿ^s^as^26.798^16.690^16.695^{17.031 45.349}
^K^eⁿ^t^u^c^k^y^44.347^26.686^26.693^{27.230 68.353}
^L^o^uⁱ^sⁱ^an^a^32.010^17.144^17.148^{17.494 57.196}
^Main^e^26.815^26.509^26.516^{26.815 49.457}
^Mary^l^aⁿ^d^58.499^31.332^31.340^{31.971 101.296}
^Mas^s^ach^u^s^et^t^s^82.797^81.853^81.873^{82.797 162.981}
^Mi^chⁱ^g^an^108.770^107.529^107.556^{108.770 222.412}
^Miⁿⁿ^e^s^o^t^a^78.363^77.469^77.488^{78.363 144.528}
^Mi^s^sⁱ^s^sⁱ^ppi^26.843^14.377^14.381^{14.670 39.011}
^Mi^s^s^o^u^rⁱ^59.541^45.240^45.251^{45.762 103.541}
^Mon^t^an^a^16.856^14.351^14.355^{14.517 31.598}
^N^e^bras^k^a^21.109^17.973^17.978^{18.180 39.573}
^N^e^v^a^da^7.112^3.809^3.810^{3.887 13.643}
^N^e^w^H^a^m^p^s^hⁱ^r^e^18.197^15.493^15.497^15.672^34.112
^N^e^w^Jers^ey^77.540^75.988^76.007^76.865^166.690
^N^e^w^Mexⁱ^co^11.925^10.153^10.156^10.360^24.901
^N^e^w^Y^o^rk^250.974^248.112^248.173^250.974^475.935
^N^o^rt^h^C^a^rolⁱⁿ^a^69.038^36.976^36.985^37.730^123.243
^N^o^rt^h^D^a^k^o^t^a^18.310^15.590^15.594^15.770^34.325
^O^hⁱ^o^122.259^100.194^100.219^{101.350 220.588}
^O^k^l^a^h^o^m^a^28.780^15.415^15.418^{15.729 49.007}
^O^r^eg^on^24.591^24.311^24.317^{24.591 45.355}
^Penⁿ^s^y^l^v^aⁿⁱ^a^134.810^133.273^133.306^{134.810 274.925}
^R^h^{ode Is}^l^aⁿ^d^15.825^13.473^13.477^13.629^30.209
^S^o^u^t^h^C^a^rolⁱⁿ^a^24.867^13.318^13.322^13.590^47.702

^FY²⁰⁰⁸^FY²⁰⁰⁸
^Allo^t^m^ent^s^Allo^t^m^ent^s
^FY²⁰⁰⁶^FY²⁰⁰⁷^{Prior to}^After
^Al^l^o^tm^en^ts^:^Al^l^o^t^m^en^ts^:^6-26-08:^6-26-08:^FY²⁰⁰⁹
^$2.48^a^$1.98^b^$1.98^c^$1.98^d^Al^l^o^tm^en^ts^:^e
^billioⁿ^billioⁿ^billioⁿ^billioⁿ^$⁴^.⁵^billioⁿ
^St^a^t^e^(a)^(b⁾^(c)^(d⁾^(e)
^S^o^u^t^h^D^a^k^o^t^a^14.871^12.662^12.665^12.808^27.878
^T^eⁿⁿ^e^s^s^e^e^46.363^27.033^27.039^{27.584 73.723}
^T^e^x^a^s^82.421^44.144^44.155^{45.044 158.110}
^U^t^ah^17.120^14.576^14.580^{14.745 32.094}
^V^e^rm^on^t^13.639^11.613^11.616^{11.747 25.568}
^Vⁱ^rgⁱⁿⁱ^a^71.259^38.166^38.175^{38.944 118.084}
^Was^hⁱⁿ^g^t^on^40.450^39.988^39.998^{40.450 74.603}
^Wes^t^Vⁱ^rgⁱⁿⁱ^a^23.818^17.660^17.665^17.935^40.584
^Wi^s^c^on^sⁱⁿ^70.538^69.733^69.750^{70.538 130.096}
^Wy^omⁱⁿ^g⁶^.854^5.836^5.838^{5.903 12.850}
^T^o^tal²^,449.16^1,949.83^1,950.314^1,977.027^4,476.302
^Source:^D^e^part^m^eⁿ^t^of^H^eal^t^h^an^{d H}^u^m^aⁿ^S^e^rvⁱ^ces^(H^H^S^{) f}ⁱⁿ^a^l^reg^u^l^{ar f}^uⁿ^d^al^l^o^catⁱ^oⁿ^s^f^o^r^F^Y²⁰⁰⁶
^t^h^r^o^{ugh FY}^{2009. T}^h^es^{e i}ⁿ^cl^u^d^{e t}^rⁱ^b^al^al^l^o^t^m^en^t^s^.
^{a. T}^h^{e total reg}^u^l^{ar f}^uⁿ^d^{appropriation}^f^o^r^{FY2006 w}^a^s^$2.48^billion^,^{$1.98 bi}^llioⁿ^of^w^h^ich^w^a^s
^{appropriated in}^P^.^L^.^109-^149,^an^{d $500 m}^illionⁱⁿ^P^.^L^.^109-^{204. In}^itially^{, P}^.^L^.^109-¹⁴⁹
^ap^p^r^o^p^r^iated^$²^.⁰^b^illioⁿ^f^o^r^r^e^g^u^l^ar^f^uⁿ^d^s,^b^u^t^th^{e am}^o^uⁿ^t^w^a^{s su}^b^j^{ect to}^{a 1}^%^acr^o^ss-^th^e-
^{board res}^c^is^sⁱ^on^{, res}^u^ltin^gⁱⁿ^{a $1.98 billion}^a^ppropriation^(P^.L^{. 109-}^{148). In}^addition^,^both
^trainⁱⁿ^g^an^{d tech}ⁿⁱ^{cal as}^sⁱ^s^t^an^{ce and}^th^{e lev}^e^ragⁱⁿ^gⁱⁿ^cen^tiv^{e an}^{d R}^E^A^C^{H f}^uⁿ^d^s^w^e^re
^redu^{ced by}^1%ⁱⁿ^col^u^mⁿ^(a).
^{b. C}^oⁿ^g^r^es^s^approv^{ed a y}^ear-^l^on^g^con^tⁱⁿ^uⁱⁿ^g^res^o^l^u^tⁱ^oⁿ^f^o^r^F^Y²⁰⁰⁷^(P.L^.^110-^5),^w^hⁱ^c^h^w^a^s^en^act^ed
^on^F^e^bru^a^ry^{15, 2007. T}^h^{e law}^prov^ided^th^at^L^I^HEA^P^receiv^e^th^{e s}^a^m^e^am^ouⁿ^t^of^f^uⁿ^d^s^f^o^r
^F^Y^{2007 t}^h^at^w^a^s^appropri^a^t^e^d^f^o^r^F^Y²⁰⁰⁶ⁱⁿ^P.L^.^109-^{149, as}^redu^{ced by}^{a 1%}^res^cⁱ^s^sⁱ^on
^(P.L^{. 109-}^148).
^{c. T}^h^{e in}^{itial allotm}^en^ts^f^o^r^{FY2008 w}^e^{re s}^lig^h^tly^g^r^{eater th}^an^f^o^{r FY2007, des}^pⁱ^t^e^th^{e s}ⁱ^m^ilar
^appropri^a^tⁱ^oⁿ^s^l^e^v^e^l^s^,^du^e^t^o^{a 1.747%}^acros^s^-^t^h^e-^{board res}^cⁱ^s^sⁱ^on^f^o^{r m}^o^s^t^D^e^part^m^eⁿ^t^s^of
^L^a^bor,^H^eal^t^h^an^{d H}^u^m^aⁿ^S^e^rvⁱ^ces^{, an}^{d Edu}^catⁱ^oⁿ^prog^ram^s^{. S}^{ee P.L}^.^110-^161,^Dⁱ^vⁱ^sⁱ^on
^G^,^S^ectⁱ^oⁿ^528.^T^hⁱ^s^m^ean^t^t^h^at^s^e^t^asⁱ^d^es^f^o^{r l}^e^v^e^ragⁱⁿ^gⁱⁿ^cen^tⁱ^v^{e an}^{d R}^E^A^C^H^g^r^an^t^s^{, an}^d
^f^o^{r t}^r^aiⁿⁱⁿ^g^an^{d t}^echⁿⁱ^cal^as^sⁱ^s^t^an^{ce, w}^e^{re s}^lⁱ^g^h^t^l^y^redu^{ced f}^r^om^F^Y^{2007 l}^e^v^e^l^s^.
^d.^On^J^uⁿ^e^{26, 2008, HHS releas}^{ed an}^addition^a^l^$26.^{7 m}^illionⁱⁿ^f^o^rm^u^l^{a g}^r^an^ts^{to th}^{e s}^t^ates^{. T}^h^es^e
^f^uⁿ^d^s^h^a^d^b^een^{set asid}^{e f}^o^r^lev^e^r^a^gⁱⁿ^gⁱⁿ^cen^tiv^{e an}^d^REA^C^{H g}^r^an^{ts u}ⁿ^{til HHS r}^ealized^th^at
^C^oⁿ^g^r^es^s^h^a^{d n}^o^t^appropri^a^t^e^{d t}^h^es^{e f}^uⁿ^d^sⁱⁿ^P.L^.^110-^161.^A^s^{a res}^u^l^t^,^di^s^t^ri^bu^tⁱ^oⁿ^s^w^e^re
^r^e^-^calcu^lated^uⁿ^d^er^th^{e “}ⁿ^ew^{” L}^I^HEA^P^f^o^r^m^u^l^a,^an^d^ad^d^itioⁿ^a^l^f^uⁿ^d^s^w^e^r^e^p^r^o^v^id^ed^to^th^e
^s^t^ates^.
^{e. Co}ⁿ^g^r^{ess ap}^p^r^o^p^r^iated^ap^p^r^o^x^im^ately^$⁴^.⁵^b^illioⁿ^f^o^r^L^I^HEA^P^as^p^a^r^t^o^f^a^coⁿ^tin^uⁱⁿ^g^r^e^so^lu^tioⁿ
^(P^.L^{. 110-}^{329). Of}^th^is^am^ouⁿ^t^{, $840 m}^illion^w^a^s^{allocated u}ⁿ^d^{er th}^{e “}ⁿ^ew^{” L}^I^HEA^P
^fo^r^m^{ula, w}^ith^th^{e rem}^aⁱⁿ^{der allocated accord}ⁱⁿ^g^{to th}^{e proportion}^s^of^th^{e “}^o^ld”^LI^H^E^AP
^fo^r^m^ul^a^.