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LIHEAP IM 1999-11 Optional Use of DOE Weatherization Rules for LIHEAP Funds Spent on Weatherization Activities

Special Topics

Published: June 15, 1999
Audience:
Low Income Home Energy Assistance Program (LIHEAP)
Category:
Guidance, Policies, Procedures, Information Memorandums (IM)

TO:            LOW INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP)
               GRANTEES AND OTHER INTERESTED PARTIES

SUBJECT:       Optional Use of DOE Weatherization Rules for
               LIHEAP Funds Spent on Weatherization Activities

RELATED
REFERENCES:    Low Income Home Energy Assistance Act, Title
               XXVI of the Omnibus Budget Reconciliation Act of
               1981, Public Law 97-35, as amended; LIHEAP
               Information Memorandum 94-18, dated 7/13/94; Part
               A of the Energy Conservation in Existing Buildings
               Act of 1976 (title IV of the Energy Conservation
               and Production Act of 1976, Public Law 94-385, as
               amended); Department of Energy weatherization
               regulations at 10 CFR Part 440.

PURPOSE:       To advise LIHEAP grantees that they may use
               some, all or none of the statutory and regulatory
               provisions that apply to the Department of
               Energy's Low Income Weatherization Assistance
               Program when spending LIHEAP funds on
               weatherization activities, provided the grantee
               administers both programs.

BACKGROUND:    The Human Services Amendments of 1994 (Public
               Law 103-252) reauthorized the Low Income Home
               Energy Assistance Program (LIHEAP) through fiscal
               year 1999.  (The Coats Human Services
               Reauthorization Act of 1998, Public Law 105-285,
               has subsequently reauthorized the program through
               FY 2004.)  Public Law 103-252 made a number of
               changes to the Low Income Home Energy Assistance
               Act, including a change that allows the Department
               of Health and Human Services (HHS) to permit
               LIHEAP grantees to follow Department of Energy
               (DOE) rules applicable to the DOE Low Income
               Weatherization Assistance Program (LIWAP) when
               spending LIHEAP funds for  weatherization
               activities.  Section 2605(c)(1)(D) of the LIHEAP
               statute, as amended by Public Law 103-252, says
               that grantees' LIHEAP applications/plans must
               describe "any rules promulgated by the Department
               of Energy for administration of its Low Income
               Weatherization Assistance Program which the State,
               to the extent permitted by the Secretary [of HHS]
               to increase consistency between federally assisted
               programs, will follow regarding the use of funds
               provided under this title by the State for such
               weatherization and energy-related home repairs and
               improvements."

               LIHEAP Information Memorandum 94-18, dated
               7/13/94, described the changes made by
               Public Law 103-252 and said HHS would specify by
               regulation the extent to which DOE rules may be
               used for LIHEAP funds spent for weatherization
               activities. We have not issued such regulations,
               but are now taking this opportunity to specify the
               extent to which DOE/LIWAP rules may be used for
               LIHEAP weatherization activities.

CONTENT:       At their option, LIHEAP grantees that administer
               both a LIHEAP weatherization component and
               the DOE Low Income Weatherization Assistance
               Program (LIWAP) in a fiscal year may choose to use
               in their LIHEAP weatherization component during
               that fiscal year some, all or none of the current
               DOE LIWAP rules found in the DOE LIWAP statute,
               regulations, and official program notices.

               This means that grantees that provide both LIHEAP
               weatherization and DOE LIWAP weatherization
               may administer their LIHEAP weatherization:

                 o    entirely under the LIHEAP statute and LIHEAP
                       regulations;

                 o    partly under the LIHEAP statute and LIHEAP
                      regulations, and partly under the DOE/LIWAP
                      statute and LIWAP regulations; or

                 o    entirely under the DOE/LIWAP statute and
                      LIWAP regulations.

               LIHEAP grantees that administer both a LIHEAP
               weatherization component and the DOE/LIWAP
               program and that adopt some or all of DOE's
               weatherization rules may use those rules for
               their LIHEAP weatherization components only.
               All other LIHEAP components must be administered
               entirely under the LIHEAP statute and regulations
.

               Most Indian tribes and tribal organizations that
               receive direct funding from HHS under LIHEAP
               are not direct grantees under the DOE/LIWAP program.
               Accordingly, they may not use the DOE/LIWAP rules
               for the expenditure of LIHEAP funds for
               weatherization activities.

               DECIDING WHICH, IF ANY, DOE LIWAP RULES TO ADOPT

               In most cases, LIHEAP and LIWAP weatherization
               rules are compatible.

               In some cases, DOE weatherization rules allow
               more flexibility than LIHEAP rules do.
               For example, at 10 CFR 440.22(b), DOE's LIWAP
               regulations allow LIWAP grantees to weatherize a
               building containing rental dwelling units if at
               least 66 percent of the dwelling units in the
               building (50 percent for 2- and 4-unit buildings)
               are eligible units and certain other conditions
               are met.  This DOE rule, for example, allows a
               grantee to replace the central furnace of a multi-
               unit building if these conditions are met, even if
               some of the building's units are occupied by
               households not eligible for LIWAP assistance.
               However, section 2605(b)(2) of the LIHEAP statute
               limits LIHEAP eligibility to households that have
               incomes at or below the greater of 150 percent of
               the poverty level or 60 percent of state median
               income or that receive certain need-tested federal
               assistance, and the LIHEAP statute and regulations
               do not provide for exceptions.  Accordingly, under
               LIHEAP rules, all residents of a multi-unit
               building must be eligible households in order to
               use LIHEAP funds to replace the building's central
               furnace.  Adopting the DOE/LIWAP rules in this
               case would provide more flexibility in the use of
               LIHEAP weatherization funds.

               In other cases, LIHEAP rules allow more flexibility.
               For example, the LIHEAP statute and regulations do
               not set a maximum average amount that grantees may
               spend per household or home/unit for LIHEAP weatherization.
               Section 2605(b)(1)(C) of the LIHEAP statute authorizes
               grantees to "provide low-cost residential
               weatherization and other cost-effective energy-
               related home repair," and section 2605(k) allows
               grantees to use LIHEAP funds "for low-cost
               residential weatherization or other energy-related
               home repair for low-income households."  However,
               HHS has not defined "low-cost"; under the block
               grant regulations, LIHEAP grantees define this
               term for their own LIHEAP weatherization
               components.  On the other hand, at 10 CFR
               440.18(b), DOE's LIWAP regulations set a maximum
               LIWAP state-wide average cost per dwelling unit
               weatherized; for program year 1999, the maximum
               average cost "for labor, weatherization materials,
               and related matters" generally is $2,032 per
               dwelling unit weatherized.  In addition, 10 CFR
               440.18(a) requires that at least 40% of the LIWAP
               funds be spent for weatherization materials,
               unless DOE approves a State's application to waive
               the 40% requirement.  Grantees that want to carry
               out more comprehensive weatherization activities
               such as furnace replacement therefore might prefer
               LIHEAP rules in these cases.

               So, LIHEAP grantees that want the most flexibility,
               and want to use in their LIHEAP weatherization
               programs the LIHEAP rules they prefer and the DOE
               LIWAP rules they prefer, may choose to adopt only
               a limited number of LIWAP rules.  LIHEAP grantees
               that want the most consistency between their LIHEAP
               weatherization and their DOE weatherization may
               choose to administer their LIHEAP weatherization
               entirely under DOE LIWAP rules.  And LIHEAP grantees
               that want consistency among their LIHEAP components
               may choose to administer their LIHEAP weatherization
               entirely under LIHEAP rules.

               There is only one instance where DOE rules permit
               DOE grantees to adopt LIHEAP rules for their
               DOE LIWAP programs where the LIHEAP and LIWAP
               rules might be inconsistent:  10 CFR 440.3
               allows LIWAP grantees to use LIHEAP eligibility
               criteria for their LIWAP programs under certain
               conditions.

               REQUIREMENTS FOR LIHEAP APPLICATIONS/PLANS

               In accordance with section 2605(c)(1)(D) of the
               LIHEAP statute, as amended in 1994, LIHEAP
               grantees that carry out weatherization and other
               energy-related home repairs and improvements
               with LIHEAP funds must:

                 o    describe in their LIHEAP plans the LIHEAP
                      weatherization they will provide; and

                 o    if they choose to administer their LIHEAP
                      weatherization partly or entirely under
                      DOE LIWAP rules, describe in their LIHEAP
                      plans the DOE LIWAP rules they are adopting
                      for their LIHEAP weatherization.

               Pages 12 and 18 of the current LIHEAP model plan
               provide space for these descriptions.  (See LIHEAP
               Information Memorandum 99-9, dated April 9, 1999,
               for a copy of the current model plan.)  LIHEAP grantees
               should make appropriate amendments to their LIHEAP
               plans for a fiscal year before the end of the fiscal year.
               Section 2605(d) of the LIHEAP statute requires
               grantees to spend their LIHEAP funds in accordance
               with their LIHEAP plans or with revisions to the
               plans.

               ADDITIONAL IMPORTANT POINTS

               In accordance with section 2605(k) of the LIHEAP
               statute, the maximum amount of LIHEAP funds that
               a LIHEAP grantee may use for weatherization in a
               fiscal year continues to be not more than 15 percent
               of the funds allotted or available to the grantee
               for the fiscal year, or not more than 25 percent
               of the LIHEAP funds allotted or available to the
               grantee for the fiscal year if the grantee receives
               a waiver from HHS.

               LIHEAP funds used for weatherization--including
               funds used for planning,administration, reporting,
               and auditing of LIHEAP weatherization--remain LIHEAP
               funds, regardless of whether the grantee chooses to
               spend them under DOE/LIWAP rules.  The funds must
               be audited as part of the LIHEAP program.  They
               cannot be transferred to the DOE weatherization
               program. They may not be used under the DOE/LIWAP
               statute and rules unless they have been obligated for
               weatherization purposes by the grantee, that is,
               they must be legally committed for weatherization
               purposes to an entity other than an entity of the
               State government.

INQUIRIES TO:  Janet M. Fox, Director
               Telephone:  (202) 401-9351

                         or

               Ann Bowker, Program Analyst
               Telephone:  (202) 401-5308

               Division of Energy Assistance
               Office of Community Services, ACF, HHS
               370 L'Enfant Promenade, S.W.
               Washington, D.C.  20447
               Fax:  (202) 401-5718

                                   _______________/s____________
                                   Janet M. Fox
                                   Director
                                   Division of Energy Assistance
                                   Office of Community Services