Sponsors (3)
The bill speeds and prioritizes federal LIHEAP funds to households and improves oversight by limiting state carryovers, but it reduces state flexibility and may force cuts or impose administrative burdens that could create service gaps for vulnerable households.
Low-income households will receive LIHEAP assistance faster 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.
State governments' ability to carry over large multi-year LIHEAP reserves is limited, increasing the likelihood federal funds are used for households instead of being stockpiled.
State governments and the Secretary of Health and Human Services gain clearer, more predictable timing and reporting because States must notify HHS when they intend to reserve funds, improving federal oversight and accountability.
Low-income households may face service gaps during unusually cold or hot periods because States have less flexibility to smooth spending across seasons under the new obligation and expenditure deadlines.
State governments that rely on carryover reserves above the caps may need to reduce LIHEAP services or shift state funds to comply, potentially reducing assistance available to needy households.
State and local governments will face increased administrative burden to track deadlines and submit reservation notices to HHS, possibly requiring more staff or diverting resources from program delivery.
Based on analysis of 2 sections of legislative text.
Imposes deadlines for States to obligate and expend LIHEAP funds, allows limited reserves (15% per payment, total reserves capped at 50%), and requires notification to the Secretary.
Official title: To amend part A of title IV of the Social Security Act to establish deadlines for the obligation and expenditure of funds and allow States to establish rainy day funds under the program of block grants to States for temporary assistance for needy families.
Introduced March 26, 2025 by Mike Carey · Last progress March 26, 2025
Requires States to obligate and spend low-income energy assistance payments on a fixed timeline and allows limited reserves. States must obligate funds by the end of the next fiscal year and fully expend them by the end of the second succeeding fiscal year, with limited carryover and a notification requirement. Includes a reserve rule that lets States hold up to 15% of a given payment for future use (subject to an overall cap equal to 50% of the prior year’s payment). The change takes effect October 1, 2026.