# The LIHEAP Formula

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URL: https://www.frixlaw.com/law-library/documents/crs%3ARL33275

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** May 2, 2019
- **Citation:** RL33275

## Text

The LIHEAP Formula
Libby Perl
Specialist in Housing Policy
Updated May 2, 2019

Congressional Research Service
7-....
www.crs.gov
RL33275

SUMMARY
RL33275

The LIHEAP Formula
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
emergency contingency funds may be released to one or more grantees at the discretion
of the Secretary of the Department of Health and Human Services (HHS) based on
emergency need. This report focuses on the way in which regular funds are distributed.

May 2, 2019
Libby Perl
Specialist in Housing Policy
-re-acte--@crs.loc.gov
For a copy of the full report,
please call 7-.... or visit
www.crs.gov.

Regular LIHEAP funds are allocated to the states according to a formula that has a long and complicated history.
(Tribes receive a share of state funding, while a percentage of regular funds is set aside for territories.) Prior to
enactment of LIHEAP, in 1981, a series of predecessor energy assistance programs focused on the heating needs
of cold weather states. This focus was in part the result of high heating oil prices throughout the 1970s. When
LIHEAP was enacted, it adopted the formula of its immediate predecessor program, the Low Income Energy
Assistance Program (LIEAP). Funds under LIEAP were distributed according to a multi-step formula that was
more favorable to colder-weather states. The LIHEAP statute specified that states would continue to receive the
same percentage of regular funds that they did under the LIEAP formula. This is sometimes referred to as the
“old” LIHEAP formula.
After several years, when Congress reauthorized LIHEAP in 1984 it changed the program’s formula by requiring
the use of more recent population and energy data (data were not updated under the “old” formula) and reducing
the emphasis on heating needs. The effect of these changes meant that, in general, some funding would be shifted
from colder-weather states to warmer-weather states. (Using FY2019 formula data, the figure below shows which
states receive a greater share of funds under the “new” and “old” formulas.) To prevent a dramatic shift of funds,
Congress added two “hold-harmless” provisions to the formula. The percentage of funds that states receive
under the formula enacted in 1984 is sometimes referred to as the “new” formula.
New formula data is used to calculate state allotments
when appropriations for LIHEAP regular funds
exceed approximately $2 billion. In the years
following the enactment of the “new” LIHEAP
formula, appropriations did not reach this level, so
until the mid-2000s funds were largely distributed
according to the “old” formula percentages. However,
in FY2006, and in FY2009 through FY2019, regular
fund appropriations have ranged from $2.5 billion to
$4.5 billion, and the “new” formula has been
incorporated into the way in which funds are
distributed to the states. Notably, however, since
FY2009 Congress has limited the operation of the
“new” formula by requiring that the majority of
regular funds be distributed using “old” formula
percentages. For distributions to the states from
FY2009-FY2019, see Table C-1.

Favorability of the “New” and “Old” LIHEAP Formulas
by State (FY2019)

Source: Based on Department of Health and Human Services
Data

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Contents
Introduction to LIHEAP .................................................................................................................. 1
LIHEAP Formula Basics ................................................................................................................. 1
What Is the “Old” LIHEAP Formula? ...................................................................................... 2
What is the “New” LIHEAP Formula? ..................................................................................... 2
The LIHEAP Formula and Congressional Appropriations ....................................................... 3
Determining State LIHEAP Allotments Using the “New” Formula ............................................... 4
Calculating the New Formula Percentages ............................................................................... 4
Using the New Formula Percentages to Allocate Funds to the States ....................................... 6
“Old” Formula: Appropriations at or Below $1.975 Billion ............................................... 6
“New” Formula with Hold-Harmless Level: Appropriations Between $1.975
Billion and $2.25 Billion ................................................................................................. 7
“New” Formula with Hold-Harmless Level and Rate: Appropriations At or Above
$2.25 Billion .................................................................................................................... 8
Implementation of the “New” LIHEAP Formula ...................................................................... 9

Figures
Figure B-1. Estimated LIHEAP Allocations at Various Hypothetical Appropriations
Levels for Three Types of States ................................................................................................ 19

Tables
Table 1. Low-Income Home Energy Program (LIHEAP): “Old” and “New” Allotment
Percentages by State, FY2019 ...................................................................................................... 9
Table 2. Recent State Allotment Percentages Under the “New” LIHEAP Formula .......................11
Table A-1. LIHEAP Estimated State Allotments for Regular Funds at Various
Hypothetical Appropriation Levels ............................................................................................ 15
Table C-1. LIHEAP Actual State Regular Fund Allocations for FY2009 through FY2019 .......... 21
Table D-1. Factors Used in Select Energy Assistance Formulas, FY1975-FY1980 ..................... 27
Table D-2. Distribution of Funds Under LIEAP ........................................................................... 31

Appendixes
Appendix A. Estimated Allotments to the States Under Various Hypothetical
Appropriations Levels ................................................................................................................ 14
Appendix B. Further Depiction of How State Allotments Depend Upon Appropriation
Levels ......................................................................................................................................... 18
Appendix C. LIHEAP Formula Fund Allocations to the States, FY2010-FY2019 ....................... 20
Appendix D. History of the LIHEAP Formula .............................................................................. 25

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Contacts
Author Contact Information .......................................................................................................... 34

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Introduction to LIHEAP
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 to 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 annual regular
LIHEAP funds at $5.1 billion per year from FY2005 through FY2007.1
The federal LIHEAP statute has very broad guidelines, with many 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 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).2 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, last appropriated in FY2011, may be released and
allotted to one or more states at the discretion of the President and the Secretary of HHS.3 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.4
For more information on LIHEAP more generally, see CRS Report RL31865, LIHEAP: Program
and Funding, by Libby Perl. The remainder of this report discusses only the history and methods
of distributing regular LIHEAP funds to the states. Funds for tribes are included in each state’s
formula allocations and are distributed at the state level based on eligible tribal members.
Territories receive funds separately as a percentage set aside of regular funds, so neither tribes nor
territories are included in the formula discussion.

LIHEAP Formula Basics
The current statutory LIHEAP formula was enacted in 1984 as part of P.L. 98-558, the Human
Services Reauthorization Act. The statutory formula replaced a formula from a predecessor
program to LIHEAP, the Low Income Energy Assistance Program (LIEAP), which was active for
one year (FY1981) prior to enactment of LIHEAP. The LIEAP formula emphasized the heating
1 LIHEAP is codified at 42 U.S.C. §§8621-8630.
2 The formula section is codified at 42 U.S.C. §8623.
3 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.
4 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.

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needs of cold-weather states. When Congress changed the LIHEAP formula in 1984, there were
two primary differences from the previous formula: home heating needs were not emphasized to
the same degree, and the law provided that HHS use the most recent data available to calculate
allotments (the LIEAP formula used static data to distribute funds to the states).
For more information about both the history of energy assistance formulas from the 1970s
through enactment of LIHEAP as well as the enactment of the statutory formula, see Appendix
D.

What Is the “Old” LIHEAP Formula?
The term “old” LIHEAP formula refers to the way in which regular funds were distributed using
the formula under LIEAP, which was then adopted by LIHEAP when it was enacted. Congress
directed that LIEAP state allocations be determined using a complex combination of alternate
formulas and factors that included residential energy expenditures, a measure of “coldness” called
heating degree days, and household income. Further, as specified in law, the data for each factor
were either from a particular year or measured a change over a particular period of time, so the
data inputs did not change. See Table D-2 for LIEAP formula data.
The result of the LIEAP combination of formulas was that each state was assigned a static
percentage of funds that did not change from one year to the next. For example, Minnesota
received approximately 4.0% of total LIHEAP funds under this formula, and Florida received
not-quite 1.4% of the total. See column (a) of Table 1 for each state’s share of funds under the
“old” LIHEAP formula.

What is the “New” LIHEAP Formula?
The term “new” LIHEAP formula refers to the way in which funds are to be distributed via the
statutory formula enacted as part of P.L. 98-558. The statute provides that each state’s share of
funds is to be based on low-income household expenditures on home energy in the state. See the
statutory language in the text box, below.
Based on the statutory language, HHS calculates heating and cooling consumption and
expenditures by low-income households in each state, with the numbers updated each year. (See
“Calculating the New Formula Percentages,” later in this report, for more details about how the
formula rates are calculated.) Each state’s share is then based on the ratio of low-income
household expenditures on home energy for the state to all expenditures of low-income
households in the country. For example, when formula data were updated in FY2019,
Minnesota’s share of funds under the “new” formula was approximately 1.9% of the total and
Florida’s was about 4.4%. See column (b) of Table 1 for FY2019 formula shares.
However, unlike under the “old” formula, states do not necessarily receive their “new” formula
percentage share of funds. As can be seen from the Minnesota and Florida examples, the
implementation of the “new” LIHEAP formula meant that some states saw their share of funding
reduced, while others saw their share increased. As a result, Congress included in the statutory
formula two “hold harmless” provisions to make sure that states that saw their shares of total
funds decrease were prevented from dramatic drops in funding. The hold harmless provisions
operate so that states that gain the most funding have their share reduced to compensate states that
lose funding. See “Using the “New” Formula Percentages to Allocate Funds to the States,” later
in this report, for a more detailed description about how the hold-harmless provisions operate.

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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.5
(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 P.L. 98-139 [the FY1984 appropriation] shall have their allotments reduced to the
extent necessary to ensure that—
…
(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 LIHEAP Formula and Congressional Appropriations
In the 25 years after the enactment of the “new” LIHEAP formula, Congress, with few
exceptions, did not appropriate sufficient regular funds to require use of “new” formula data.
Because of the hold-harmless provisions in the statutory formula, appropriations must exceed
approximately $2 billion before the “new” formula percentages are used. During these years, the
“old” formula percentages (found in column (a) of Table 1) were used to distribute LIHEAP
funds to the states.
Starting in FY2009, appropriations for LIHEAP regular funds have exceeded $2 billion, ranging
from $3.3 billion to $4.5 billion over the last 10 years. However, the “new” formula has not
operated as is provided for in the statute. Instead, Congress has directed, in appropriations
language, that a portion of funds be distributed using the “new” formula, and the remainder using
the “old” formula. For example, in FY2019 P.L. 115-245 provided that $716 million be
distributed according to the “new” formula, and the remainder, about $2.96 billion (after
deducting funds for the territories and training and technical assistance), distributed using the
“old” formula percentages. For allocations to the states from FY2009-FY2019, see Appendix C.
The next section of this report (“Determining State LIHEAP Allotments Using the “New”
Formula”) goes into additional detail about how the “new” formula operates, while Appendix D
explains more about the history of the “old” LIHEAP formula.

5 42 U.S.C. §8623(a)(2)

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Determining State LIHEAP Allotments Using the
“New” Formula
The LIHEAP statutory 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 in a particular year.






If the annual appropriation level is at or below the equivalent of a hypothetical
FY1984 appropriation of $1.975 billion, then the “old ”LIHEAP formula
percentages apply.
If appropriations exceed a hypothetical FY1984 appropriation of $1.975 billion,
then “new” formula percentages apply and are used to calculate state allotments.
To calculate the new formula percentages, HHS determines the heating and
cooling costs of low-income households in each state. If the appropriation is less
than $2.25 billion, the new formula percentages are used together with a holdharmless level that prevents states from falling below the amount they would
have received at the hypothetical FY1984 appropriations level.
Finally, if appropriations equal or exceed $2.25 billion, the “new” percentages
apply, as does the hold-harmless level, and, in addition, a hold-harmless rate
increases the “new” formula percentage for certain states.

This section describes the steps involved in allocating LIHEAP funds to the states under each of
the appropriations triggers.

Calculating the New Formula Percentages
The LIHEAP formula uses the home energy expenditures of low-income households in each state
as a first step in determining the amount of total regular funds that each state will receive.6
Specifically, this means estimating the amount of money that all low-income households (as
defined by the LIHEAP statute)7 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. Further, as mentioned in the previous section, the “new” formula requires HHS to
determine allocations “on the basis of the most recent satisfactory data available to the
Secretary.”8 HHS updates these data annually. The most recent data were provided to CRS in
2019.
The process for capturing the expenditures of low-income households 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)

6 “[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).
7 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).
8 42 U.S.C. §8623(a)(4).

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







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 2016 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.9 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 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 2016, 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
2009 RECS.10 HHS adjusts the EIA heating and cooling consumption estimates
using heating degree day and cooling degree day data.
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. HHS uses
Census data to determine fuel sources used by low-income households. The most
recent information on low-income households and the fuel sources they use
comes from the American Community Survey five-year estimates for 2012-2016.
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 2009
RECS.
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

9 A state’s heating and cooling degree data are weighted by population in the state.
10 For more information about the RECS, see the EIA website at http://www.eia.doe.gov/emeu/recs/.

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

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.11 The most
recent price data used to calculate formula rates are from 2016.
New Formula Percentage. 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 for
each state. Table 1 at the end of this section shows both the percentages under
the “old” formula (column (a)) and the most recent “new” formula percentages
(column (b)), received by CRS from HHS in 2019. To see how the formula rates
for each state have changed in recent years, see Table 2.

These new formula percentages 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, they do not represent the exact percentage of funds that all states will receive under the
new formula. The ultimate allotments are determined after application of both the hold-harmless
level and hold-harmless rate, described in the next section. The new percentages are the starting
point for determining how funds will be allocated to the states.

Using the “New” Formula Percentages to Allocate Funds to the
States
The LIHEAP “new” formula percentages that HHS calculates using the most recent satisfactory
data available do not necessarily represent the percentage 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.

“Old” Formula: Appropriations at or Below $1.975 Billion
The LIHEAP statute does not contain an explicit trigger for the “new” formula rates to be used.
However, the statute specifies that states must receive no 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.” As a result, up to this appropriation level, states receive the same
percentage of funds that they would have received at a given appropriation level under the “old”
LIHEAP formula.12
The 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
11 The EIA’s state data tables are available at http://www.eia.doe.gov/emeu/states/_seds.html.
12 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.

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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 (TTA) and for the leveraging
incentive (LI) 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. For example, in FY2019, Congress appropriated $2.988 million for
TTA and no funding for LI /REACH, so the equivalent of an FY1984 appropriation of $1.975
billion is approximately $1.978 billion.13
The LIHEAP formula in FY1984 distributed funds by giving states the same percentage of funds
that they received in FY1981 under the predecessor program, the Low Income Energy Assistance
Program (LIEAP). Table 1 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. 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. For comparison
purposes, the dollar amounts also assume that funds for the territories would be 0.5% of the total,
a change made by HHS beginning with the FY2014 appropriation.14

“New” Formula with Hold-Harmless Level: Appropriations Between $1.975
Billion and $2.25 Billion
If the regular LIHEAP appropriation exceeds the equivalent of 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 percentages 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 1 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 Colorado is held harmless. The
dollar amount of funds that Colorado receives pursuant to the hold-harmless level is $31.613
million. But for the hold-harmless level, Colorado would receive less than this dollar amount at
its new formula percentage at certain appropriation levels. Eventually, when appropriations
increase sufficiently, the percentage of funds under the new formula for hold-harmless states will
exceed their hold harmless amounts and they will begin to receive their new percentage of funds.
This appropriation level varies for each state. For example, at lower appropriation levels, the
$31.613 million hold-harmless level for Colorado exceeds the state’s new percentage share of
1.438% of total funds. However, by the time appropriations reach $2.25 billion, Colorado’s new
percentage share exceeds $31.613 million and the state begins to receive funds at the new
percentage. Eventually, many states will receive the percentage of funds at their new
percentage.15

13 This amount is arrived at by adding $2.988 million for TTA to $1.975 billion.
14 HHS Administration for Children and Families, Office of Community Services, LIHEAP Dear Colleague Notice

Allocation for Territories FY2014, November 22, 2013, http://www.acf.hhs.gov/programs/ocs/resource/liheapallocation-for-territories-fy-2014.
15 The exceptions to this are states that benefit from the hold-harmless rate, described in the next section, and the states
that are ratably reduced in order to compensate states that benefit from the hold-harmless rate.

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The hold-harmless level is achieved by reducing the allocation of funds to states with the greatest
proportional gains under the new formula percentages.16 For example, under the most recent
LIHEAP formula percentages, states with the greatest proportional gains were Nevada, Arizona,
and Texas. Depending on the appropriation level, these states (and others with the greatest gains)
may then have their allotments reduced to hold harmless the states that would otherwise see
reduced benefits. So although these states with the greatest proportional gains will see their
LIHEAP allotments increase under the new formula, their allotments may not increase to reach
their new formula rates (column (b) of Table 1).
Columns (b) and (c) of Table A-1 show estimated allotments to the states at hypothetical
appropriations levels between $1.975 billion and $2.25 billion. 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).

“New” Formula with Hold-Harmless Level and Rate: Appropriations 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, the hold-harmless level still applies,
but, in addition, a new hold-harmless rate is applied. Specifically, 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 the percentage they would have received at a $2.14 billion
appropriation level.17 (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
percentage share of funds it would have received at $2.14 billion 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 hold-harmless level, the allocations to the states with the greatest proportional gains
are then ratably reduced again until there is no funding shortfall. Column (e) of Table 1 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, Idaho benefits from the hold-harmless
rate and receives 0.580% 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. States that are ratably reduced see their allocations at $2.25 billion fall below the amount
they would receive at $2.249 billion, while states that benefit from the hold-harmless rate see
their funding jump up slightly. Columns (d) through (i) of Table A-1 in Appendix A show
estimated allotments to states at various hypothetical appropriations levels at or above $2.25
billion.

16 “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).
17 “[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).

Congressional Research Service

8

The LIHEAP Formula

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; thereafter, 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 1 for these percentages). 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 use of new formula data.18 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 percentages of the
“old” formula established by LIEAP. From FY2010 through the present, Congress has continued
to appropriate funds using a version of a split between the “old” and “new” formulas. See Table
C-1 in Appendix C of this report for the distribution of funds to the states from FY2009 through
FY2019.
Table 1. Low-Income Home Energy Program (LIHEAP):
“Old” and “New” Allotment Percentages by State, FY2019
Hold-Harmless Levela
“Old”
Allotment
Percentage
(%)
(a)

“New”
Allotment
Percentage
(%)
(b)

State Held
Harmless?
(c)

Alabama

0.860

1.719

N

—

N

—

Alaska

0.549

0.438

Y

10.828

Y

0.507

Arizona

0.416

1.543

N

—

N

—

Arkansas

0.656

0.904

N

—

N

—

California

4.614

5.991

N

—

N

—

Colorado

1.609

1.438

Y

31.729

N

—

Connecticut

2.099

2.069

Y

41.392

N

—

Delaware

0.279

0.383

N

—

N

—

District of
Columbia

0.326

0.193

Y

6.428

Y

0.301

Florida

1.361

4.372

N

—

N

—

Georgia

1.076

3.312

N

—

N

—

Hawaii

0.108

0.148

N

—

N

—

Idaho

0.628

0.362

Y

12.376

Y

0.580

Illinois

5.809

4.361

Y

114.565

N

—

State

HoldHarmless
Level
($Millions)
(d)

Hold-Harmless Rate

State Held
Harmless?
(e)

HoldHarmless
Rate (%)
(f)

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

Congressional Research Service

9

The LIHEAP Formula

Hold-Harmless Levela
“Old”
Allotment
Percentage
(%)
(a)

“New”
Allotment
Percentage
(%)
(b)

State Held
Harmless?
(c)

Indiana

2.630

1.786

Y

51.872

N

—

Iowa

1.864

0.978

Y

36.762

N

—

Kansas

0.856

1.053

N

—

N

—

Kentucky

1.369

1.546

N

—

N

—

Louisiana

0.879

1.587

N

—

N

—

Maine

1.360

0.936

Y

26.815

N

—

Maryland

1.607

2.371

N

—

N

—

Massachusetts

4.198

3.606

Y

82.797

N

—

Michigan

5.515

4.249

Y

108.770

N

—

Minnesota

3.973

1.855

Y

78.363

N

—

Mississippi

0.737

0.938

N

—

N

—

Missouri

2.320

2.173

Y

45.762

N

—

Montana

0.736

0.342

Y

14.517

Y

0.680

Nebraska

0.922

0.504

Y

18.180

Y

0.852

Nevada

0.195

0.726

N

—

N

—

New
Hampshire

0.795

0.731

Y

15.672

Y

0.734

New Jersey

3.897

3.247

Y

76.865

N

—

New Mexico

0.521

0.595

N

—

N

—

New York

12.725

8.539

Y

250.974

N

—

North
Carolina

1.896

3.000

N

—

N

—

North
Dakota

0.800

0.242

Y

15.770

Y

0.739

Ohio

5.139

3.957

Y

101.350

N

—

Oklahoma

0.791

1.338

N

—

N

—

Oregon

1.247

0.843

Y

24.591

N

—

Pennsylvania

6.835

5.278

Y

134.810

N

—

Rhode Island

0.691

0.628

Y

13.629

Y

0.639

South
Carolina

0.683

1.458

N

—

N

—

South Dakota

0.649

0.237

Y

12.808

Y

0.600

Tennessee

1.386

1.952

N

—

N

—

Texas

2.264

7.831

N

—

N

—

State

Congressional Research Service

HoldHarmless
Level
($Millions)
(d)

Hold-Harmless Rate

State Held
Harmless?
(e)

HoldHarmless
Rate (%)
(f)

10

The LIHEAP Formula

Hold-Harmless Levela

Hold-Harmless Rate

“Old”
Allotment
Percentage
(%)
(a)

“New”
Allotment
Percentage
(%)
(b)

State Held
Harmless?
(c)

Utah

0.748

0.588

Y

14.745

Y

0.691

Vermont

0.596

0.461

Y

11.747

Y

0.550

Virginia

1.957

2.703

N

—

N

—

Washington

2.051

1.513

Y

40.450

N

—

West Virginia

0.906

0.793

Y

17.864

Y

0.837

Wisconsin

3.576

1.991

Y

70.538

N

—

Wyoming

0.299

0.194

Y

5.903

Y

0.277

State

HoldHarmless
Level
($Millions)
(d)

State Held
Harmless?
(e)

HoldHarmless
Rate (%)
(f)

Source: New allotment percentages were provided to CRS by HHS in 2019. Information in columns (c) through
(f) are based on CRS calculations using the new allotment percentages. The calculations for the hold-harmless
level assume that no funds would be allocated for training and technical assistance and that the territorial
allotments are the same percentage they were in FY1984. However, in calculating whether the hold-harmless
rate applies, it is assumed that approximately $3 million would be provided for training and technical assistance,
and 0.5% of funds for the territories.
Notes: The actual percentage of total regular funds each state receives at funding levels above $1.975 billion
may differ from the new formula percentages due to the hold-harmless provisions and the ratable reductions of
some states to cover shortfall from these hold-harmless provisions.
a. The states that benefit from the hold-harmless level vary depending on the amount appropriated for
LIHEAP regular funds. The states listed here benefit from the hold-harmless level when appropriations just
exceed the equivalent of an FY1984 appropriation of $1.975 billion.

Table 2. Recent State Allotment Percentages Under the “New” LIHEAP Formula
(Fiscal years indicate when new formula rates were used to distribute funds to states)
“New” Formula Percentages
“Old”
Formula
Percentages

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

Alabama

0.860%

1.583%

1.716%

1.686%

1.488%

1.521%

1.509%

1.628

1.719

Alaska

0.549

0.398

0.522

0.563

0.491

0.432

0.430

0.439

0.438

Arizona

0.416

1.132

1.326

1.379

1.424

1.440

1.314

1.419

1.543

Arkansas

0.656

0.899

0.876

0.876

0.846

0.891

0.844

0.931

0.904

California

4.614

4.452

4.433

4.536

5.371

5.504

5.231

5.522

5.991

Colorado

1.609

1.267

1.264

1.270

1.391

1.413

1.484

1.422

1.438

Connecticut

2.099

2.398

2.416

2.371

2.711

2.508

2.411

2.265

2.069

Delaware

0.279

0.375

0.421

0.427

0.407

0.409

0.385

0.412

0.383

District of
Columbia

0.326

0.194

0.184

0.149

0.173

0.189

0.207

0.259

0.193

Florida

1.361

4.593

5.475

5.201

4.057

3.936

3.944

4.226

4.372

Georgia

1.076

2.742

3.137

3.166

3.068

2.924

2.911

3.120

3.312

States

Congressional Research Service

11

The LIHEAP Formula

“New” Formula Percentages
“Old”
Formula
Percentages

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

Hawaii

0.108

0.205

0.185

0.230

0.219

0.196

0.168

0.149

0.148

Idaho

0.628

0.335

0.339

0.371

0.364

0.387

0.351

0.343

0.362

Illinois

5.809

5.243

4.655

4.510

4.075

4.245

4.466

4.128

4.361

Indiana

2.630

2.209

1.814

1.934

1.712

1.792

1.795

1.790

1.786

Iowa

1.864

1.080

1.001

1.065

1.005

1.054

1.111

1.003

0.978

Kansas

0.856

0.967

1.002

0.945

0.932

0.982

1.045

1.048

1.053

Kentucky

1.369

1.344

1.329

1.457

1.318

1.395

1.462

1.512

1.546

Louisiana

0.879

1.414

1.378

1.387

1.236

1.394

1.397

1.490

1.587

Maine

1.360

1.010

0.927

1.041

1.052

1.066

1.062

1.025

0.936

Maryland

1.607

2.197

2.344

2.193

2.206

2.347

2.408

2.486

2.371

Massachusetts

4.198

3.730

4.032

4.138

4.395

4.501

4.407

4.050

3.606

Michigan

5.515

4.863

4.966

4.681

4.535

4.357

4.148

4.013

4.249

Minnesota

3.973

2.047

1.849

1.921

1.827

1.869

2.044

1.887

1.855

Mississippi

0.737

0.990

0.955

0.953

0.825

0.910

0.932

0.956

0.938

Missouri

2.320

1.829

1.963

2.021

2.140

2.145

2.140

2.216

2.173

Montana

0.736

0.328

0.280

0.314

0.347

0.358

0.367

0.351

0.342

Nebraska

0.922

0.591

0.555

0.561

0.483

0.531

0.549

0.534

0.504

Nevada

0.195

0.498

0.563

0.537

0.722

0.718

0.713

0.750

0.726

New Hampshire

0.795

0.742

0.623

0.731

0.753

0.788

0.862

0.768

0.731

New Jersey

3.897

4.010

3.812

3.620

3.703

3.766

3.452

3.391

3.247

New Mexico

0.521

0.430

0.407

0.394

0.533

0.571

0.560

0.552

0.595

New York

12.725

10.227

9.445

9.318

10.792

9.477

9.572

9.149

8.539

North Carolina

1.896

2.619

2.954

2.891

2.817

2.828

2.779

2.974

3.000

North Dakota

0.800

0.302

0.215

0.254

0.251

0.275

0.317

0.284

0.242

Ohio

5.139

4.687

4.243

4.368

3.836

3.850

3.932

3.944

3.957

Oklahoma

0.791

1.152

1.207

1.219

1.186

1.207

1.228

1.288

1.338

Oregon

1.247

0.664

0.712

0.781

0.885

0.860

0.817

0.822

0.843

Pennsylvania

6.835

5.807

5.571

5.720

5.856

5.810

5.989

5.619

5.278

Rhode Island

0.691

0.670

0.753

0.712

0.857

0.803

0.770

0.758

0.628

South Carolina

0.683

1.201

1.394

1.403

1.288

1.323

1.307

1.374

1.458

South Dakota

0.649

0.272

0.233

0.240

0.242

0.257

0.264

0.251

0.237

Tennessee

1.386

1.700

1.865

1.848

1.730

1.771

1.864

1.899

1.952

Texas

2.264

7.135

7.183

6.942

6.529

6.870

6.945

7.487

7.831

Utah

0.748

0.413

0.452

0.494

0.568

0.526

0.509

0.534

0.588

States

Congressional Research Service

12

The LIHEAP Formula

“New” Formula Percentages
“Old”
Formula
Percentages

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

Vermont

0.596

0.396

0.417

0.425

0.490

0.503

0.526

0.449

0.461

Virginia

1.957

2.490

2.581

2.607

2.588

2.692

2.663

2.735

2.703

Washington

2.051

1.145

1.244

1.305

1.443

1.434

1.331

1.422

1.513

West Virginia

0.906

0.638

0.625

0.631

0.661

0.707

0.680

0.743

0.793

Wisconsin

3.576

2.230

2.010

2.054

2.000

2.100

2.219

2.018

1.991

Wyoming

0.299

0.154

0.146

0.160

0.173

0.169

0.180

0.162

0.194

States

Source: State allotment percentage data were provided to CRS by HHS.

Congressional Research Service

13

The LIHEAP Formula

Appendix A. Estimated Allotments to the States
Under Various Hypothetical Appropriations 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 recent LIHEAP practice where funds are set aside for training and
technical assistance, the equivalent appropriation level is approximately $1.978 billion. The
remaining columns show estimated allotments at appropriations of $2.14 billion, just under $2.25
billion, $2.25 billion, $3.0 billion, $3.69 billion (the amount appropriated in FY2019), $4.0
billion, and $5.1 billion, the amount at which the LIHEAP program was last authorized in P.L.
109-58. In each case, the estimates assume that 0.5% would be set aside for the territories, the
amount set aside by HHS starting in FY2014.

Congressional Research Service

14

Table A-1. LIHEAP Estimated State Allotments for Regular Funds at Various Hypothetical Appropriation Levels
($ in millions)

State

“Old” Formula

“New” Formula, Hold-Harmless
Level Only

Hypothetical
$1.975 Billion
in FY1984
(a)

$2.14 Billion
(b)

Just Under
$2.25 Billion
(c)

“New” Formula, Hold-Harmless Level and Rate

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$3.69 Billion
(g)

$4.0 Billion
(h)

$5.1 Billion
(i)

Alabama

16.963

22.387

26.851

26.423

40.879

51.260

63.067

68.364

87.178

Alaska

10.828

10.828

10.828

11.344

12.606

15.130

18.615

20.178

25.731

Arizona

8.203

10.827

12.985

12.779

19.770

32.932

43.669

47.929

61.578

Arkansas

12.943

17.082

20.214

20.162

22.463

26.961

33.171

35.957

45.853

California

91.001

120.099

133.942

133.942

148.844

178.649

219.797

238.258

303.828

Colorado

31.729

31.729

32.152

32.152

35.729

42.884

52.761

57.193

72.933

Connecticut

41.392

43.994

46.258

46.258

51.405

61.698

75.909

82.285

104.930

Delaware

5.494

7.251

8.570

8.558

9.523

11.430

14.062

15.244

19.439

District of
Columbia

6.428

6.428

6.428

6.734

7.484

8.982

11.051

11.979

15.276

Florida

26.840

35.423

42.486

41.809

64.683

107.747

142.878

156.814

201.472

Georgia

21.221

28.007

33.592

33.057

51.142

85.191

112.967

123.986

159.295

Hawaii

2.137

2.820

3.309

3.309

3.678

4.414

5.431

5.887

7.507

Idaho

12.376

12.376

12.376

12.966

14.409

17.294

21.277

23.064

29.412

Illinois

114.565

114.565

114.565

114.565

114.565

130.049

160.004

173.442

221.175

Indiana

51.872

51.872

51.872

51.872

51.872

53.273

65.543

71.048

90.601

Iowa

36.762

36.762

36.762

36.762

36.762

36.762

36.762

38.876

49.575

Kansas

16.883

22.281

23.553

23.553

26.174

31.415

38.651

41.897

53.427

Kentucky

26.994

32.883

34.576

34.576

38.422

46.116

56.738

61.503

78.430

CRS-15

State

“Old” Formula

“New” Formula, Hold-Harmless
Level Only

Hypothetical
$1.975 Billion
in FY1984
(a)

$2.14 Billion
(b)

Just Under
$2.25 Billion
(c)

“New” Formula, Hold-Harmless Level and Rate

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$3.69 Billion
(g)

$4.0 Billion
(h)

$5.1 Billion
(i)

Louisiana

17.342

22.887

27.451

27.014

39.438

47.335

58.238

63.129

80.503

Maine

26.815

26.815

26.815

26.815

26.815

27.900

34.327

37.210

47.450

Maryland

31.693

41.827

50.168

49.369

58.906

70.702

86.987

94.293

120.243

Massachusetts

82.797

82.797

82.797

82.797

89.590

107.529

132.296

143.408

182.874

Michigan

108.770

108.770

108.770

108.770

108.770

126.693

155.875

168.966

215.467

Minnesota

78.363

78.363

78.363

78.363

78.363

78.363

78.363

78.363

94.066

Mississippi

14.543

19.193

20.979

20.979

23.313

27.981

34.426

37.318

47.588

Missouri

45.762

46.213

48.592

48.592

53.999

64.811

79.739

86.436

110.224

Montana

14.517

14.517

14.517

15.208

16.900

20.285

24.957

27.053

34.498

Nebraska

18.180

18.180

18.180

19.046

21.166

25.404

31.255

33.880

43.204

Nevada

3.853

5.085

6.099

6.002

9.285

15.467

20.510

22.511

28.921

New
Hampshire

15.672

15.672

16.352

16.418

18.245

21.898

26.942

29.205

37.243

New Jersey

76.865

76.865

76.865

76.865

80.661

96.813

119.112

129.116

164.649

New Mexico

10.270

12.657

13.308

13.308

14.789

17.750

21.838

23.673

30.187

New York

250.974

250.974

250.974

250.974

250.974

254.637

313.288

339.601

433.060

North
Carolina

37.403

49.363

59.205

58.263

74.528

89.452

110.055

119.299

152.130

North Dakota

15.770

15.770

15.770

16.521

18.359

22.035

27.111

29.388

37.475

Ohio

101.350

101.350

101.350

101.350

101.350

117.991

145.169

157.361

200.668

Oklahoma

15.592

20.578

24.681

24.288

33.248

39.906

49.098

53.221

67.868

Oregon

24.591

24.591

24.591

24.591

24.591

25.139

30.930

33.528

42.755

CRS-16

State

“Old” Formula

“New” Formula, Hold-Harmless
Level Only

Hypothetical
$1.975 Billion
in FY1984
(a)

$2.14 Billion
(b)

Just Under
$2.25 Billion
(c)

“New” Formula, Hold-Harmless Level and Rate

$2.25 Billion
(d)

$2.5 Billion
(e)

$3.0 Billion
(f)

$3.69 Billion
(g)

$4.0 Billion
(h)

$5.1 Billion
(i)

Pennsylvania

134.810

134.810

134.810

134.810

134.810

157.378

193.627

209.890

267.653

Rhode Island

13.629

13.629

14.032

14.278

15.867

19.044

23.430

25.398

32.388

South Carolina

13.472

17.780

21.325

20.985

32.466

43.474

53.487

57.980

73.936

South Dakota

12.808

12.808

12.808

13.418

14.911

17.896

22.019

23.868

30.436

Tennessee

27.344

36.088

43.284

42.595

48.496

58.207

71.614

77.629

98.992

Texas

44.653

58.932

70.683

69.557

107.611

179.256

237.702

260.887

335.183

Utah

14.745

14.745

14.745

15.447

17.166

20.603

25.348

27.477

35.039

Vermont

11.747

11.747

11.747

12.306

13.675

16.414

20.194

21.890

27.915

Virginia

38.606

50.950

60.441

60.137

67.165

80.614

99.182

107.512

137.101

Washington

40.450

40.450

40.450

40.450

40.450

45.114

55.505

60.167

76.725

West Virginia

17.864

17.864

17.864

18.715

20.797

24.962

30.711

33.290

42.452

Wisconsin

70.538

70.538

70.538

70.538

70.538

70.538

73.042

79.177

100.967

Wyoming

5.903

5.903

5.903

6.185

6.873

8.249

10.149

11.001

14.029

1,972.33

2,126.327

2,235.777

2,235.777

2,484.527

2,982.027

3,668.879

3,977.027

5,071.527

Total

Source: Congressional Research Service (CRS) calculations based on factors provided by the Department of Health and Human Services (HHS) in 2019.
Notes: These estimates use recent appropriations practice in which Congress has allocated $2.988 million for training and technical assistance, but no funds for
leveraging incentive and REACH grants. With the exception of column (a), it also factors in HHS practice since FY2014 to set aside 0.50% of regular funds for the
territories. Differing allocations for these purposes could change state allotments. Column (a) assumes that funds for the territories would be the same percentage
distributed that year – approximately 0.135%.

CRS-17

The LIHEAP Formula

Appendix B. Further Depiction of How State
Allotments Depend Upon Appropriation Levels
Figure B-1 graphically illustrates the interplay of the hold harmless provisions in state allotments
for three types of states over a range of appropriations from $0 to $5.1 billion.
Represented are (1) a hold-harmless level state, (2) a state whose increased allocations are ratably
reduced in order to maintain allocations for the hold-harmless level and rate states, and (3) a holdharmless level and rate state. These three states are not representative of all states in the three
categories; see Table A-1 for the range of individual state allocations.
In the figure, there are three vertical areas. These areas separate the three levels of appropriations
that are triggers under current law and were explained previously in this report. The figure also
graphs the three types of states. These three types of states are as follows.






Hold-Harmless Level Only State. This state is depicted with a blue line running
from $0 to point G. States with “new” formula percentages that start out lower
than their “old” formula percentages 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%. 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 1, these are the
states that have a “Y” in column (c) and an “N” in column (e).
Ratable Reduction State. This state is depicted with a purple line running from
$0 to point H. States with “new” formula percentages that are higher than their
“old” formula percentages are subject to a ratable reduction. Their new formula
percentage is greater than their old (FY1984) percentage. 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 1, these are the states that have an “N” in both column (c) and column (e).
Hold-Harmless Level and Rate State. This state is depicted with a red line
running from $0 to point I. States have lower new formula percentages and are
subject to both the hold-harmless level and the hold harmless rate provisions. 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 (point E) 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 1, these are the states that have a
“Y” in column (c) and a “Y” in the column (e).

Congressional Research Service

18

Figure B-1. Estimated LIHEAP Allocations at Various Hypothetical Appropriations Levels for Three Types of States

Source: Figure created by CRS using formula rates provided by HHS in 2019.

CRS-19

The LIHEAP Formula

Appendix C. LIHEAP Formula Fund Allocations to
the States, FY2010-FY2019
Since FY2009, Congress, through appropriations language, has directed that a portion of the
regular funds appropriated be distributed to the states via the “new” LIHEAP formula, and the
remainder using the “old” formula percentages. The portion of funds distributed via the new
formula has ranged from 14% to nearly 20% of regular funds appropriated, depending on the
year.
Table C-1, below, shows actual LIHEAP regular fund allocations to the states from FY2009
through FY2019. In each year, funds for the territories, training and technical assistance (TTA),
and leveraging incentive grants (if appropriated) are first subtracted from the total appropriation.
The remainder of funding is distributed to the states via formula as directed in appropriations
language. For example, in FY2019 Congress directed that $716 million be distributed via the
“new” LIHEAP formula, and the remainder via the “old” LIHEAP formula percentages.
The column header in Table C-1 for each year shows the total regular funds appropriated for
LIHEAP (including funds that were not distributed via the formula such as rescissions and
transfers). Total funding distributed to the states via formula is in the final row of the table for
each year. The table notes describe the division between “new” and “old” formulas, and any other
relevant information.

Congressional Research Service

20

Table C-1. LIHEAP Actual State Regular Fund Allocations for
FY2009 through FY2019
($ in millions)
Actual Allocations, FY2009-FY2019

State

FY2009:
$4.51
Billiona

FY2010:
$4.51
Billionb

FY2011:
$4.50
Billionc

FY2012:
$3.47
Billiond

FY2013:
$3.26
Billione

FY2014:
$3.39
Billionf

FY2015:
$3.39
Billiong

FY2016:
$3.37
Billionh

FY2017:
$3.39
Billioni

FY2018:
$3.64
Billionj

FY2019:
$3.69
Billionk

Alabama

60.063

58.799

59.419

47.408

48.269

48.885

44.387

43.551

44.941

51.554

54.195

Alaska

23.568

25.308

23.667

18.002

17.171

18.841

17.482

17.496

17.488

18.779

18.847

Arizona

29.047

33.729

32.922

23.852

23.343

23.641

21.581

21.062

21.734

27.972

29.579

Arkansas

36.497

35.773

34.985

28.537

26.746

27.505

26.777

27.858

26.819

31.134

30.551

California

225.894

202.749

202.843

154.574

145.410

153.592

174.086

177.168

171.344

191.855

205.097

Colorado

63.474

64.257

62.139

47.308

44.270

46.378

48.889

49.002

51.041

53.175

53.793

Connecticut

95.783

96.942

98.254

79.532

76.014

77.413

85.764

80.690

78.713

80.738

75.291

Delaware

17.384

15.189

15.172

11.957

12.573

13.016

12.547

12.574

12.036

13.653

12.955

District of
Columbia

14.653

13.992

14.051

10.687

9.976

10.474

10.379

10.387

10.382

11.149

11.189

Florida

95.037

110.354

107.714

78.040

76.376

77.351

70.611

68.911

71.111

91.520

96.776

Georgia

75.141

87.252

85.164

61.702

60.387

61.158

55.829

54.485

56.224

72.360

76.517

Hawaii

4.652

6.023

6.027

6.107

5.416

6.159

5.622

5.487

5.143

5.004

5.011

Idaho

26.939

26.939

27.052

20.576

19.207

20.166

19.982

19.999

19.989

21.465

21.543

Illinois

237.236

232.865

238.712

185.684

160.191

167.458

167.396

166.270

167.396

171.008

172.195

Indiana

103.609

104.151

102.749

80.006

72.374

75.820

75.792

75.282

75.792

77.428

76.977

Iowa

67.803

67.803

68.137

54.813

51.292

53.735

53.715

53.354

53.715

54.874

54.554

Kansas

45.349

41.757

42.327

32.160

31.397

31.019

30.717

31.921

33.606

36.217

36.514

Kentucky

68.353

57.742

58.335

46.423

43.483

48.288

44.896

46.713

48.634

53.572

54.725

Louisiana

57.196

51.870

53.164

43.422

40.864

42.062

38.390

42.234

42.462

48.120

50.899

CRS-21

Actual Allocations, FY2009-FY2019

State

FY2009:
$4.51
Billiona

FY2010:
$4.51
Billionb

FY2011:
$4.50
Billionc

FY2012:
$3.47
Billiond

FY2013:
$3.26
Billione

FY2014:
$3.39
Billionf

FY2015:
$3.39
Billiong

FY2016:
$3.37
Billionh

FY2017:
$3.39
Billioni

FY2018:
$3.64
Billionj

FY2019:
$3.69
Billionk

Maine

49.457

54.309

53.539

39.982

37.414

39.195

39.181

38.917

39.181

40.265

39.793

Maryland

101.296

82.002

85.523

69.790

70.390

68.513

68.854

72.255

74.051

81.680

78.971

Massachusetts

162.981

175.524

175.178

132.731

132.256

140.014

146.328

148.768

147.242

147.723

136.484

Michigan

222.412

233.524

228.294

173.450

165.582

165.444

161.827

157.859

158.928

162.357

166.349

Minnesota

144.528

144.528

145.241

116.839

109.335

114.541

114.498

113.728

114.498

116.969

116.288

Mississippi

39.011

39.661

38.834

31.591

29.313

30.120

26.996

29.051

29.746

32.594

32.271

Missouri

103.541

95.257

95.596

68.231

66.553

70.882

73.772

73.295

73.618

81.052

80.217

Montana

31.598

31.598

31.730

24.135

22.529

23.654

23.438

23.457

23.446

25.177

25.268

Nebraska

39.573

39.573

39.738

30.226

28.214

29.623

29.353

29.377

29.363

31.531

31.645

Nevada

13.643

15.841

15.462

11.203

10.964

11.104

10.136

9.892

10.208

13.138

13.892

New
Hampshire

34.112

34.112

34.255

26.055

24.321

25.536

25.750

26.399

28.546

27.994

27.279

New Jersey

166.690

177.196

180.991

136.746

124.480

124.570

126.586

127.094

120.142

127.410

124.027

New Mexico

24.901

22.355

22.448

17.074

15.938

16.734

17.844

18.766

18.600

19.778

21.003

New York

475.935

479.526

495.801

375.710

350.169

366.843

381.440

364.242

366.707

374.621

372.438

North
Carolina

123.243

109.339

111.263

83.011

87.702

88.271

86.504

86.702

85.848

97.447

98.542

North
Dakota

34.325

34.325

34.469

26.218

25.695

25.460

25.482

25.469

27.350

27.449

Ohio

220.588

223.108

225.398

165.463

144.794

154.314

148.087

147.091

148.087

154.051

154.948

Oklahoma

49.007

47.902

47.717

36.094

35.955

37.147

36.338

36.844

37.498

41.886

43.405

Oregon

45.355

45.355

45.579

36.666

34.311

35.945

35.931

35.690

35.931

36.707

36.493

Pennsylvania

274.925

282.279

280.478

209.548

190.810

203.071

206.356

203.405

209.107

214.781

206.488

CRS-22

24.473

Actual Allocations, FY2009-FY2019
FY2009:
$4.51
Billiona

FY2010:
$4.51
Billionb

FY2011:
$4.50
Billionc

FY2012:
$3.47
Billiond

FY2013:
$3.26
Billione

FY2014:
$3.39
Billionf

FY2015:
$3.39
Billiong

FY2016:
$3.37
Billionh

FY2017:
$3.39
Billioni

FY2018:
$3.64
Billionj

FY2019:
$3.69
Billionk

Rhode Island

30.209

29.666

29.790

23.241

23.976

23.813

27.361

26.002

25.333

26.904

23.723

South
Carolina

47.702

47.311

46.909

36.270

38.335

38.825

35.442

34.588

35.693

43.107

45.498

South Dakota

27.878

27.878

27.995

21.293

19.877

20.869

20.678

20.696

20.686

22.213

22.293

Tennessee

73.723

72.092

71.595

55.405

56.856

58.040

55.161

56.101

58.666

63.972

65.651

Texas

158.110

183.593

179.200

129.832

127.064

128.686

117.473

114.645

118.304

152.258

161.004

Utah

32.094

32.094

32.228

24.513

22.882

24.025

23.806

23.825

23.814

25.572

25.665

Vermont

25.568

25.568

25.675

19.529

18.230

19.140

18.965

18.981

18.972

20.373

20.446

Virginia

118.084

100.856

102.839

80.436

78.971

81.877

81.432

83.926

83.571

91.754

91.298

Washington

74.603

74.603

74.971

60.310

56.437

59.124

59.102

58.705

59.102

60.378

60.083

West Virginia

40.584

38.884

39.047

29.700

27.723

29.108

28.842

28.866

28.852

30.982

31.094

Wisconsin

130.096

130.096

130.738

105.172

98.417

103.103

103.065

102.372

103.065

105.289

104.676

Wyoming

12.850

12.850

12.904

9.815

9.162

9.619

9.531

9.539

9.535

10.239

10.276

4,476.302

4,476.302

4,494.258

3,437.068

3,248.193

3,370.409

3,370.379

3,351.004

3,370.379

3,619.129

3,632.161

State

Total

Source: The Department of Health and Human Services (HHS) provided data on final regular fund allocations for FY2009 through FY2019. Allocations to the states
include tribal allotments.
a. Congress appropriated approximately $4.51 billion for LIHEAP as part of a continuing resolution (P.L. 110-329). Of this amount, $4.48 billion was distributed to
states and tribes, with $840 million allocated under the “new” LIHEAP formula and the remainder allocated according to the proportions of the “old” LIHEAP
formula.
b. In FY2010, Congress appropriated the same amount for LIHEAP regular funds as it had in FY2009—approximately $4.51 billion—with the same division of funds
between “old” and “new” formulas (P.L. 111-117).
c. The FY2011 Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112-10) included an across-the-board rescission of 0.2% for discretionary
accounts. This reduced the LIHEAP regular fund appropriation from approximately $4.51 billion to $4.50 billion. The total distributed via formula to states and
tribes was $4.49 billion, of which $840 million was distributed via the “new” formula and the remainder according to the “old” formula percentages.

CRS-23

d.

e.

f.

g.
h.

i.
j.
k.

CRS-24

The FY2012 LIHEAP appropriation (P.L. 112-74) included an across-the-board rescission of 0.189% that reduced the total available to $3.47 billion. Of the amount
available for formula funds, $497 million was distributed according to the “new” LIHEAP formula and the remainder according to the proportions of the “old”
LIHEAP formula.
In FY2013, Congress enacted a full-year continuing resolution funding LIHEAP (and most other federal programs) at FY2012 levels (P.L. 113-6). While LIHEAP was
funded at $3.47 billion in FY2012, funding in FY2013 was reduced by an across-the-board rescission of 0.2%, by sequestration, and by a transfer of funds within HHS,
resulting in just under $3.26 billion for the program. Of that amount, $3.25 billion was distributed to states and tribes, with $497 distributed via the “new” formula
and the remainder via the “old” formula.
The FY2014 regular fund appropriation for LIHEAP (P.L. 113-76) was reduced by 1% ($34.245 million) due to a transfer of funds within HHS, bringing the amount
available to $3.39 billion. Of the amount distributed to states and tribes by formula ($3.37 billion), $491 million was distributed according to the “new” formula and
the remainder according to the proportions of the “old” formula.
In FY2015, Congress appropriated $3.39 billion for LIHEAP regular funds (P.L. 113-235). Of the funds distributed to the states and tribes by formula, $491 million
was distributed according to the “new” formula, and the remainder, approximately $2.9 billion, according to the proportions of the “old” formula.
The FY2016 LIHEAP appropriation of $3.39 billion (P.L. 114-113) was reduced by approximately $19 million due to a transfer of funds within HHS, bringing the
amount available to $3.37 billion. Of the amount distributed to the states and tribes, $491 million was distributed according to the “new” formula, and the
remainder according to the “old” formula percentages.
In FY2017 Congress appropriated $3.39 billion for LIHEAP (P.L. 115-31). Of the amount appropriated for formula funds, $491 million was distributed according to
the “new” formula and the remainder according to the “old” formula percentages.
LIHEAP appropriations increased in FY2018 to $3.64 billion (P.L. 115-141). The total available to the states and tribes was approximately $3.62 billion. Of that
amount, nearly $679 million was distributed according to the “new” LIHEAP formula, and the remainder according to the “old” formula percentages.
LIHEAP appropriations increased again in FY2019 to $3.69 billion (P.L. 115-245). As of the date of this report, all but 1% of the appropriation had been distributed
via the formula to states and tribes. Of the amount appropriated, $716 million was distributed according to the “new” LIHEAP formula, and the remainder according
to the “old” formula percentages.

The LIHEAP Formula

Appendix D. History of the LIHEAP Formula
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.

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

Congressional Research Service

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The LIHEAP Formula

due to utility shutoff or lack of fuel.”19 During the four years the EECP was funded, the majority
of funds were used for weatherization expenses.20
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 coldweather states, including the heating degree day variable in a formula favors states with greater
heating needs. Squaring the heating degree days magnifies this effect.21 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.22 The CSA acknowledged the emphasis on heating needs in its
formula, stating that the FY1975 allocation “was heavily weighted to the coldest areas.”23 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.24
The first year that Congress specifically appropriated funds for direct assistance to help lowincome 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) or who could prove “dire financial need” as the result of paying
large energy bills.25 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.26 Congress again appropriated $200 million

19 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.
20 See, for example, House Appropriations Committee, report to accompany H.R. 4877, the FY1977 Supplemental
Appropriations Act, 95th Cong., 1st 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.”
21 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.
22 Community Services Administration, “Emergency Energy Conservation Program: Submission of Funding Plans,”
Federal Register, vol. 41, no. 208, October 27, 1976, p. 47096.
23 Ibid.
24 Ibid., pp. 47096-47097.
25 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.
26 The formula was described in the Senate Appropriations Committee report to accompany H.R. 4877, the FY1977
Supplemental Appropriations Act, 95th Cong., 1st 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.

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The LIHEAP Formula

for crisis intervention in both FY1978 and FY1979.27 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.28 In FY1979, funds
were made available to assist families facing “substantially increased energy costs and/or life- or
health-threatening situations caused by winter-related energy emergencies.”29
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.30 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.
Table D-1. Factors Used in Select Energy Assistance Formulas, FY1975-FY1980
Emergency Energy
Conservation Program:a
FY1975
(P.L. 93-644)

Special Crisis
Intervention Program:b
FY1977
(P.L. 95-26)

Low Income Supplemental
Energy Allowances:c
FY1980
(P.L. 96-126)

(Heating degree days)2

(Heating degree days)2

(Heating degree days)2

Number of homeowners in
poverty

Number of households in poverty

Number of households below 125%
of poverty

Number of persons over age 65 with
income less than 125% of poverty

Difference in home heating
expenditures between 1978 and 1979

Relative cost of fuel
Sources: For the formula under P.L. 93-644, see Community Services Administration, “Emergency Energy
Conservation Program: Submission of Funding Plans,” Federal Register, vol. 41, no. 208, October 27, 1976,
p. 47096. For the formula under P.L. 95-26, see Senate Appropriations Committee, report to accompany H.R.
4877, the FY1977 Supplemental Appropriations Act, 95th Congress, 1st session, S.Rept. 95-64, March 24, 1977.
The formula for P.L. 96-126 is contained within the law.
a. Of the funds appropriated for the Emergency Energy Conservation Program, 90% were distributed via the
formula, while the remaining 10% were divided among the 12 coldest states as measured by heating degree

27 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).
28 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.
29 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.
30 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).

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b.
c.

days. The formula involved multiplying heating degree days squared by the number of homeowners in
poverty to arrive at the percentage share for each state.
The Special Crisis Intervention Program did not specify a weight for each of the four variables used to
determine allocations.
The Low Income Supplemental Energy Allowances arrived at states’ shares of funds through the formula ½
(heating degree days2 * number of households below 125% of poverty) + ½ (difference in home heating
expenditures between 1978 and 1980). Of the $1.6 billion appropriated for energy assistance in FY1980,
$400 million was set aside for SSI recipients. The formula to distribute those funds was ⅓ (heating degree
days2 * number of households below 125% of poverty) + ⅓ (difference in home heating expenditures
between 1978 and 1979) + ⅓ (SSI recipients in each state relative to the national total).

The Low Income Energy Assistance Program (LIEAP) Formula
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.31 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.
The formula developed under LIEAP continues to be relevant in several ways: (1) it has been
used to distribute LIHEAP funds as recently as FY2007, (2) the percentage shares of funds that
states received continue to be the benchmark for the way in which states are held harmless under
the current LIHEAP formula, and (3) from FY2009 through the present, Congress has distributed
the bulk of LIHEAP funds using the LIEAP formula percentages (for more information, see
Appendix C). As a result, the variables used are important in understanding the current formula
and the way in which it is used to distribute funds.
Ultimately, Congress developed the LIEAP formula through two different laws: P.L. 96-223, the
law that authorized LIEAP, and P.L. 96-369, a continuing resolution enacted six months later. The
following two subsections describe the elements of the formula developed through each.

Formula Under P.L. 96-223
The formula developed as part of S. 1724, and subsequently incorporated into P.L. 96-223,
reflected, in part, the concern that the problem of rising energy costs were “most critical in areas
with high home heating costs.”32 The formula for LIEAP arose from a Senate compromise over
three different proposals. The debate centered around the degree to which heating should be
emphasized over energy expenditures generally. Some Members wanted a formula that accounted
for all energy uses and was not based solely on geographic location,33 while others saw the
31 “Windfall Profits Tax.” In CQ Almanac 1979, 35th ed., 609-32 (Washington, DC: Congressional Quarterly, 1980)

http://library.cqpress.com/cqalmanac/cqal79-1184031.
32 Senate Committee on Labor and Human Resources, Home Energy Assistance Act, report to accompany S. 1724, 96th
Cong., 1st sess., S.Rept. 96-378, October 25, 1979, p. 12.
33 See, for example, Sen. Russell Long, “Home Energy Assistance Act,” Senate debate, Congressional Record, vol.
125, part 25 (November 14, 1979), p. 32278. “But the formula [as passed by the Senate Finance Committee] went a

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The LIHEAP Formula

program’s purpose as solely to provide heating assistance.34 The debate on the Senate floor was,
at times, contentious, with Senator Edmund Muskie (Maine) resolved to filibuster in order to
support the heating needs of northern states.35 Primarily at issue was the measure of heating
degree days, particularly the extent to which they would be weighted and whether they would be
squared.
Under the final compromise LIEAP formula in P.L. 96-223, states received funds under one of
four different alternatives used to measure home energy need, depending on which one benefitted
a state the most. Three of the four options contained different combinations of several formula
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, 50% of the allocation was based on
residential energy expenditures and 50% on heating degree days squared
multiplied by the number of households at or below the Bureau of Labor
Statistics (BLS) lower living standard.36
Under the second formula alternative, 25% of the allocation was based on
residential energy expenditures and 75% 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, 50% of the allocation was based on
residential energy expenditures and 50% 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), SSI,
or Food Stamp benefits. The option was added to S. 1724 at the Finance
Committee level in recognition of the fact that (in general) funds were not being
provided for cooling costs.37

long way toward considering the total household expense for energy, not just heating.”
34 Sen. Rudy Boschwitz, “Home Energy Assistance Act,” Senate debate, Congressional Record, vol. 125, part 25
(November 14, 1979), p. 32290. “I refer back to the committee report, which talks about the intent of the act being to
‘offset high heating costs (and cooling where medically necessary) and that assistance not be a supplement of all
utilities and their use to run appliances, etc.’... It is very clear that it is the intent of the Senate to help keep people
warm.”
35 Sen. Edmund Muskie, “Home Energy Assistance Act,” Senate debate, Congressional Record, vol. 125, part 25
(November 14, 1979), p. 32288. “I do not often do this. As a matter of fact, this is my 21 st year in the Senate, and I can
recall only one other time in which I have sought to use delay and extended debate to make a point and to achieve
justice. I am not a filibusterer. If I did not believe deeply about this, I would not be standing here.”
36 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 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.
37 Sen. Russell B. Long, “Home Energy Assistance Act,” Senate debate, Congressional Record, vol. 125, part 25
(November 15, 1979), p. 32561. “This language was evolved in the Finance Committee. When the majority of the
committee voted to exclude such items as air-conditioning and anything related to cooling a house and limited that
formula to heating, this Senator contended that, if that were to be the case, there should be at least a minimum on which
people could depend.”

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The LIHEAP Formula

(See Table D-2 for a breakdown of these formulas.)
While the focus of the formula was on heating assistance, the LIEAP law did allow states to
provide for cooling when households could demonstrate medical necessity.38 Congress authorized
LIEAP for one year, FY1981, at $3 billion, but funds were not appropriated as part of P.L. 96223.

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 additional formula components for LIEAP were laid out.39 The
additional formula components appeared to be intended to act as a counter to the formula
developed in P.L. 96-223, which some argued benefitted warmer weather states more than was
necessary.40
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, 50% of the allocation was based on the
increase in home heating expenditures, and 50% was based on the number of
heating degree days squared times the population with income less than or equal
to 125% of poverty. This was the same formula used for the Low-Income
Supplemental Energy Allowances Program.
Under the second formula alternative, 25% of the allocation was based on total
residential energy expenditures, and 75% 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. To see the percentage of funds that
each state received under the LIEAP formula, see Table 1, column (a).

38 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.”
39 House Committee on Appropriations, report to accompany H.R. 7998, the FY1981 Departments of Labor, Health
and Human Services, and Education Appropriations Act, 96th Cong., 2nd sess., H. Rept. 96-1244, August 21, 1980, pp.
75-76.
40 See, for example, Rep. David Obey, “Low Income Energy Assistance,” House debate, Congressional Record, vol.
126, part 18 (August 27, 1980), p. 23505. “Last year the Congress adopted a formula which, very frankly, was unfair to
the South. It provided a much larger amount of the money available than it should have to Northern States. In response
to that, Senator Long, on the windfall profit tax legislation, adopted an amendment which, for the block grant portion of
the program, provided phenomenal increases for the Southern States at the expense of the Northern States.”

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The LIHEAP Formula

Although the alternative formulas under H.Rept. 96-1244 used factors similar to those in P.L. 96223, the original set of formulas was somewhat more favorable to warm-weather states. For
example, the BLS lower living standard, used in all of the P.L. 96-223 formulas but only one of
those in H.Rept. 96-1244, was higher than 125% of poverty for most household sizes, which
benefitted the South, where the low-income population was higher.41 The original set of formulas
in P.L. 96-223 also provided for a minimum benefit to states on the basis of the number of AFDC,
SSI, 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.42
Table D-2. Distribution of Funds Under LIEAP
P.L. 96-223

P.L. 96-369

Assign each state the option under which they
receive the greatest proportion of funds. If Options
2 and 3 both result in a greater proportion than
Option 1, assign the state the lesser of Option 2
or 3.

Each state receives the greater of 75% of the
amount under P.L. 96-223 or Option 1 or Option
2 under P.L. 96-369.

Option 1:

Option 1:

½ Residential energy expenditures
½ (Heating degree days)2 * Households with
income ≤ BLS lower living standard

Option 2:

¼ Residential energy expenditures
¾ (Heating degree days)2 * Households with
income ≤ BLS lower living standard

Option 3:

½ Increase in home heating expenditures
from 1978-1980a
½ (Heating degree days)2 * Population
with income ≤ 125% of poverty

Option 2:

¼ Total residential energy expenditures
1980
¾ (Heating degree days)2 * Households
with income ≤ BLS lower living
standard

½ Residential energy expenditures
½ Heating degree days * Households with
income ≤ BLS lower living standard

Option 4:

Funds sufficient for a minimum benefit of
$120 per AFDC, SSI, and Food Stamprecipient household

Source: The Crude Oil Windfall Profits Tax Act (P.L. 96-223) and the House Appropriations Committee
Report to Accompany H.R. 7998, the FY1981 Departments of Labor, Health and Human Services, and Education
Appropriations Bill, H.Rept. 96-1244, August 21, 1980.
Notes: * Multiplied by.
≤ Less than or equal to.
a. H.Rept. 96-1244 did not specify which years would be used to determine residential energy expenditures;
1978 and 1980 were the years used by HHS.

41 “The Low-Income Home Energy Assistance Program: An Analysis of the 1984 Reauthorization Issues,” Coalition of

Northeastern Governors, April 1984, p. 5.
42 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.

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The LIHEAP Formula

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.43 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.44 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 percentage 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, some legislators recognized that the multi-step LIEAP formula benefitted
cold-weather states relative to warm-weather states.45 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.46 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 1980.47
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.
43 See, for example, Senate debate, Congressional Record, vol. 125, parts 24-25 (November 13-15, 1979), pp. 32082-

32086, 32275-32293, 32558-32565, and 32576-32589.
44 House debate, Congressional Record, vol. 126, part 18 (August 27, 1980), pp. 23502-23515.
45 See, for example, Comments of Rep. Billy Tauzin, U.S. Congress, Joint Hearing before the Subcommittees of the
Committees on Energy and Commerce, Education and Labor, and Ways and Means, Energy Costs and Low Income
Energy Assistance, 98th Cong., 1st sess., February 24, 1983, pp. 119-120.
46 Report of the Committee on Energy and Commerce to accompany H.R. 2439, the Low-Income Home Energy
Assistance Amendments of 1984, 98th Cong., 2nd sess., H.Rept. 98-139, Part 2, May 15, 1984, p. 13.
47 Ibid., p. 4.

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The LIHEAP Formula

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 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.48 The amendment was
eventually dropped from H.R. 3520 in conference with the Senate.

Introduction of a Hold-Harmless Level
Efforts to reauthorize LIHEAP began 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 markups: 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.49 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, $2.5 billion in FY1986, $2.625 billion for FY1987, and $2.8 billion for FY1988.

48 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%.
49 “The Low-Income Home Energy Assistance Program: An Analysis of the 1984 Reauthorization Issues,” Coalition of
Northeastern Governors, April 1984, p. 9.

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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,
1984.50 The Senate bill contained language very similar to H.R. 2439, but made several changes
and additions to the formula.
 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 less funding 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 their 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.51 Otherwise, the
concern was that appropriations might have to increase significantly before small state allotments
would increase above their hold-harmless levels, with the states’ percentage shares of funds
declining even as total appropriations increased.
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.

Author Contact Information
Libby Perl
Specialist in Housing Policy
[redacted]@crs.loc.gov
, 7-....

50 The final version of S. 2565 can be found in the Congressional Record, daily edition, vol. 130 (October 4, 1984), p.

S13393.
51 Congressional Record, daily edition, vol. 130 (October 4, 1984), pp. S13415-S13416.

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RL33275 · VERSION 62 · UPDATED

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL33275. Public record. Not legal advice.