Liheap: Program and Funding

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 program through 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 low-income households pay for heating and cooling costs, for crisis assistance, weatherization assistance, and services (such as counseling) to reduce the need for energy assistance. 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. The largest share of LIHEAP funding goes to pay for heating assistance. In FY2014, the most recent year for which data are available, approximately 49% of funds went to pay for heating assistance, 7% was used for cooling aid, 21% went to crisis assistance, and 9% was used for weatherization. Funds are also used for administration (9% in FY2014) and up to 10% of a state's allotment can be carried over for use in the next fiscal year (4% in FY2014). In FY2014, approximately 6.3 million households received heating and/or winter crisis assistance, and 800,000 received cooling and/or summer crisis assistance. As of the date of this report, FY2017 appropriations for LIHEAP were funded through a continuing resolution (P.L. 114-254) at the FY2016 level of $3.39 billion less an across-the-board rescission of 0.1901% through April 28, 2017 (or enactment of full-year appropriations). For FY2017 funds distributed to states, tribes, and territories, see Table B-1. Prior to enactment of the FY2017 continuing resolution, the Senate Appropriations Committee-passed bill (S. 3040) proposed the same funding for LIHEAP as in FY2016-$3.39 billion for regular funds, with $491 million distributed using the new LIHEAP formula. The House Appropriations Committee-passed bill (H.R. 5926) would have appropriated $100 million more for LIHEAP than in FY2016 and the Senate Committee bill, a total of $3.49 billion for regular funds. Under H.R. 5926, $591 million would have been distributed using the new LIHEAP formula. The President's FY2017 budget proposed that LIHEAP receive $3 billion in discretionary appropriations, all allocated as regular funds. The budget also included a proposal made in previous years, that emergency contingency funds be mandatory, with their availability triggered by increases in energy prices, extreme temperatures, or increased poverty as measured by participation in the Supplemental Nutrition Assistance Program (SNAP). The budget estimated that $769 million in emergency contingency funds would be made available under this formulation in FY2017.