LIHEAP Allotments under the FY 2006 Energy Emergency Contingency Fund-FIRST AND SECOND DISTRIBUTIONS
THIS CONTAINS INFORMATION ISSUED BY THE U.S. ADMINISTRATION FOR
CHILDREN AND FAMILIES IN LIHEAP INFORMATION MEMORANDUM TRANSMITTAL
NO. LIHEAP-IM-2006-9, DATED 8/23/06
TO: LOW INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP)
GRANTEES AND OTHER INTERESTED PARTIES
SUBJECT: LIHEAP Allotments under the FY 2006 Energy
Emergency Contingency Fund-FIRST AND SECOND
DISTRIBUTIONS
RELATED
REFERENCES: The Deficit Reduction Act Of 2005, as amended
(P.L. 109-204); the Departments of Labor, Health
and Human Services, and Education, and Related
Agencies Appropriations Act, 2006 (P.L. 109-149);
the Department of Defense Appropriations Act, 2006
(P.L. 109-148); the Consolidated Appropriations
Act of 2005 (P.L. 108-447); the Low-Income Home
Energy Assistance Act, Title XXVI of the Omnibus
Budget Reconciliation Act of 1981 (Public Law
(P.L.) 97-35), as amended
PURPOSE: To provide grantees with information on two
distributions of LIHEAP emergency contingency
funds, on January 5, 2006 and March 23, 2006.
These funds were distributed to LIHEAP grantees
this winter to help them meet their additional
needs resulting from high home heating fuel prices
and cold weather. The first release on January
5th went to all States, Territories and Indian
tribes and tribal organizations, whereas the
second release on March 23th was targeted to the
25 states that experienced much colder than normal
temperatures.
BACKGROUND: The Human Services Amendments of 1994 (Public Law
103-252) amended Section 2602(e) of the LIHEAP
statute to provide for a permanent authorization
of an emergency contingency fund. Under this
provision, up to $600,000,000 may be made
available each fiscal year, in addition to other
funds that may be appropriated, "to meet the
additional home energy assistance needs of one or
more States [grantees] arising from a natural
disaster or other emergency." Funds appropriated
under this section are considered to be emergency
requirements under the terms of Section 251(b)(2)(D)
of the Balanced Budget and Emergency Deficit Control
Act of 1985 and are to be made available only after
the President submits a formal budget request to the
Congress for all or a part of the funds appropriated
under this section, provided that the request
designates the amount requested as such an emergency
requirement.
Section 2604(g) of the LIHEAP statute, as amended
in 1994 by Public Law 103-252, provides that the
Secretary of HHS may allot any funds made
available under Section 2602(e) to one or more
States [grantees], taking into account the extent
to which the State was affected by the emergency
or disaster, the availability of other resources
to the grantees under LIHEAP or any other program,
and such other factors that are deemed relevant.
Public Law (P.L.) 109-149 was signed by the
President on December 30, 2005 and included an
appropriation of $183 million for LIHEAP emergency
contingency purposes. A provision of P.L. 109-148
provided for a 1 percent rescission to these
funds, reducing them to $181.17 million. P.L. 109-
149 further provided that the emergency
contingency funds appropriated for FY 2006 are "to
remain available until September 30, 2006."
P.L. 109-204 provided a supplemental appropriation
of $1 billion to the LIHEAP program, of which $500
million was designated as block grant funds and $500
million as emergency contingency funds. The 1 percent
rescission that was applied to the December
appropriation did not affect these funds. However,
P.L. 109-204 provided that none of the $1 billion
could be used by LIHEAP grantees for administration
costs. The law also provided that $1 billion remain
available until the end of FY 2006.
In addition to the total $683.17 million
appropriated for the FY 2006 emergency contingency
fund, $20.35 million of no-year emergency funds
were carried over from FY 2005. This made $701.52
million in LIHEAP emergency contingency funds
available for release over the course of FY 2006.
Please refer to LIHEAP-IM-2006-8, dated June 15,
2006, for more information on FY 2006 LIHEAP
appropriations-including details on the initial
appropriation and the supplemental, as well as the
text of the various Public Laws referred to in
this Information Memorandum.
CONTENT: First Distribution of $100 million
On January 5, 2006, we released $100 million in FY
2006 emergency contingency funds to all States,
Territories and Indian tribes/tribal organizations
under the LIHEAP program. HHS released these
funds because of record increases in the costs of
home heating fuel prices this winter; particularly
for fuel oil, natural gas and liquefied petroleum
gas (i.e., propane). We used the following
methodology for allotting these funds:
o We allotted funds to the States on the basis of
their relative percentages of low income households
that use fuel oil, natural gas and propane as
heating fuels; weighted by their FY 1982 ("old
formula") block grant allotment ratios.
o The Indian tribes and tribal organizations that
receive direct LIHEAP funding received a share of
the total $100 million. Their contingency fund grant
awards were based on the same share of the State's
contingency allotment as the tribe or tribal
organization received of the State's regular LIHEAP
block grant allotment in January.
o We calculated each State's net allotment by
subtracting the total amount allotted to the tribes/
tribal organizations within the State from the
State's gross allotment.
o We allotted a percentage of the full release amount
to the Territories on the basis of their original
block grant percents.
You can view the State, Territory and Indian
tribes/tribal organization allotments of the $100
million, and the methodology for distributing
these funds (See Attachment 1.)
Second Distribution of $500 million
On March 23, 2006, we released $500 million to 25
States because of the continuing high costs for home
heating fuels. Unlike the January release, the $500
million was targeted to those 25 states that had the
coldest temperatures during the heating season. The
method for allocating the $500 million in LIHEAP
contingency funds provided that:
o 60% or higher of an eligible State's low income
households had to be heating with fuel oil,
natural gas and liquefied petroleum gas (i.e.,
propane); and
o A State's average population-weighted temperature
for this winter had to average at or below 40
degrees Fahrenheit (for the period from November 1,
2005 through March 18, 2006).
States had to meet both conditions to be eligible
for contingency funding. A total of 25 states met
the criteria and received a share of the $500
million in emergency contingency funds.
We used the following methodology for allotting the
$500 million to the 25 states:
o Each eligible State received funds based on the
proportion that its FY 1982 block grant allotment
ratio ("old formula") represented of the sum of
the FY 1982 allotment ratios of all eligible
States.
o We weighted the block grant percentages by the
"60% usage/40` temperature" criteria and
determined states' gross allotments
o Tribes within the 25 states received a share of
the contingency funds, based on their relative
percentage of regular block grant funds in the
state. Territories did not receive LIHEAP
contingency funds from this distribution.
o We calculated each State's net allotment by
subtracting the total amount allotted to the
tribes/tribal organizations within the State
from the State's gross allotment.
You can view the State, Territory and Indian
tribes/tribal organization allotments of the $500
million, and the methodology for distributing
these funds (See Attachment 2.)
Provisions Related to Each Contingency Distribution
January Emergency Contingency Release
No special restrictions were imposed on the use of
the $100 million emergency contingency funds
released in January. These contingency funds may
be used for any purpose authorized under LIHEAP,
including heating assistance, cooling assistance,
crisis assistance, weatherization, administrative
costs, and carryover, subject to normal LIHEAP
restrictions. The contingency funds should be
added to the regular FY 2006 block grant allotment
to determine limits on weatherization,
administration and planning costs, and Assurance
16 activities.
Along with regular block grant funds, grantees
must obligate at least 90 percent of the $100
million in contingency funds by September 30,
2006. Please refer to the Action Transmittal on
carryover and reallotment (LIHEAP-AT-2006-4),
dated June 15, 2006) to assist you in determining
your maximum carryover amount for FY 2006.
March Emergency Contingency Release
The requirements for the $500 million contingency
release in March differ somewhat from the rules
governing the use of the $100 million released in
January. The provisions contained in P.L. 109-204
for the $1 billion supplemental prohibit the use
of these funds for LIHEAP administration costs.
Therefore, none of the $500 million contingency
funds released in March to the selected states and
tribes may be used for planning and administrative
purposes.
While the $500 million in supplemental contingency
funds cannot be used for the costs of
administration and planning, they may be counted
in the base for calculating the grantee's maximum
planning and administrative costs (but these costs
must be paid from other funds, such as regular
block grant funds).
In addition, we waived the normal LIHEAP
obligation rules for the $500 million in
contingency funds. Those states and tribes that
received a share of these funds may obligate any
or all of the $500 million in FY 2006 or FY 2007,
but all of the funds must be obligated no later
than September 30, 2007. The $500 million
contingency funds are not subject to the 10
percent carryover limit for regular block grant
funds and may not be added to the base on which
the carryover limit for regular funds is
calculated. You may use these emergency funds for
any other purpose authorized under LIHEAP,
including heating assistance, cooling assistance,
crisis assistance and weatherization, subject to
normal LIHEAP restrictions.
Please see LIHEAP-IM-2006-8, dated June 15, 2006,
for more information on FY 2006 LIHEAP
appropriations.
Emergency Contingency Funds Remaining
With the release of $600 million in FY 2006,
a total of $101.52 million in emergency
contingency funds remains available for
distribution. These funds may be released in the
event of a heating or cooling crisis, a hurricane
disaster or a number of other emergency
situations. Of the $101.52 million remaining,
$20.35 million of these funds (from FY 2005) is
available until expended, and $81.17 million (from
the FY 2006 appropriation) is available until
September 30, 2006. In June, $1 million of the
remaining contingency funds was transferred to HHS
for a Medicare initiative, reducing the available
total to $100.52 million.
ATTACHMENTS: (1) Distribution of $100 million in FY 2006
LIHEAP energy emergency contingency fund
allocations to States, Territories and Indian
tribes/tribal organizations, and the formula
for allocating these funds
(2) Distribution of $500 million in FY 2006
supplemental LIHEAP contingency funds to
States and Indian tribes/tribal organizations,
and the formula for allocating these funds
(3) Total of $600 million from the two contingency
distributions to States, Territories and
Indian tribes/tribal organizations
______________/s____________
Josephine B. Robinson
Director
Office of Community Services
