Draft text of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act released yesterday would add $1.5 billion for LIHEAP to address energy access and security issues resulting from the COVID-19 pandemic. This is in addition to the $900 million released on Friday from the previous COVID-19 emergency funding legislation. The House is expected to vote on the bill this week. It will then go to the Senate for further debate. The discussion of LIHEAP begins on page 74.
As proposed, the HEROES Act includes some provisions that change the administration of the program. These provisions only apply to funds in the bill and do not affect the administration of other 2020 funds.
- Similar to CARES Act funding passed in March, the HEROES Act funds are exempt from the 2020 carryover limit and can be spent through September 2021.
- The bill requires states to make households with newly unemployed members eligible for LIHEAP: “That each grantee that receives an allotment of funds made available under this heading in this Act shall, for purposes of income eligibility, deem to be eligible any household that documents job loss or severe income loss dated after February 29, 2020, such as a layoff or furlough notice or verification of application for unemployment benefits”
- The bill allows states to use up to 12.5 percent of their allocation for administrative costs, up from the regular 10 percent. This provision applies only to funds in the HEROES Act – all other 2020 LIHEAP funding is still subject to the 10 percent cap.
- Funding will be allocated evenly between the “old” formula and the “new” formula, which will change the distribution of funds among states.
The proposed appropriation is significantly lower than the $4.3 billion requested by NEADA, but includes an increase in the administrative cost cap, which NEADA members indicated would be important in order to properly administer additional funds.
The HEROES Act also includes $1.5 billion in funding for a water assistance program. The proposed Low-Income Household Drinking Water and Wastewater Assistance program (page 1656 of the bill) would be administered by the U.S. Department of Heath and Human Services. Provisions include:
- Income eligibility set at a minimum of 150 percent of poverty and 60 percent of state median income. In the bill, households that meet either criterion are eligible.
- Optional categorical eligibility with SNAP, SSI, and VA Survivors pensions.
- Administrative costs limited to 8 percent of a state’s allocation.
- Reliance on existing infrastructure. While LIHEAP is not specifically mentioned, it is our understanding that LIHEAP is the intended delivery vehicle. “In carrying out this section, the Secretary, States, and Indian Tribes…shall, as appropriate and to the extent practicable, use existing processes, procedures, policies, and systems in place to provide assistance to low-income households, including by using existing application and approval processes.”
We are still analyzing the water proposal and will provide more information on it as it becomes available.