Sponsors (3)
The bill forces federal LIHEAP funds to move to households faster and improves oversight, but does so by restricting state carryovers and adding reporting deadlines that reduce budget flexibility and could create service gaps or administrative strain.
Low-income households receive LIHEAP funds more quickly because States must obligate funds by the end of the next fiscal year and expend them by the end of the second succeeding fiscal year.
States are prevented from large multi-year stockpiling of LIHEAP funds, increasing the likelihood that federal funds are used for household assistance instead of being held as reserves.
States must notify HHS when they intend to reserve funds, creating more predictable timing and reporting and improving federal oversight of LIHEAP reserves.
Low-income households may face service gaps during unusually cold or hot periods because deadlines limit States' flexibility to smooth spending across seasons.
States that rely on carryover reserves above the caps may have to reduce LIHEAP services or shift state funds to comply, potentially reducing assistance to needy households.
State and local agencies face increased administrative burden to track new deadlines and submit reservation notices to HHS, which could require more staff or divert resources from program delivery.
Based on analysis of 2 sections of legislative text.
Requires States to obligate LIHEAP payments within one fiscal year and expend them within two fiscal years, with limited reserve and notification rules.
Requires States to obligate and spend low-income energy assistance (LIHEAP) payments received after Oct 1, 2026 within set timeframes: obligate by the end of the following fiscal year and expend by the end of the second following fiscal year. States may reserve up to 15% of a year’s payment for future use, but total reserves cannot exceed 50% of the prior fiscal year’s payment, and States must notify the Secretary when they plan to reserve funds. The change adds a new timing and reserve rule for LIHEAP funds, creates a deadline-based accountability requirement for State agencies that administer the program, and takes effect October 1, 2026.
Introduced March 26, 2025 by Mike Carey · Last progress March 26, 2025