B-198839.OM, JUL 2, 1980

B-198839.OM, JUL 2, 1980

REQUEST FOR OPINION ON THE CONGRESSIONAL INTENT OF LOW INCOME ENERGY ASSISTANCE PROGRAMS (FILE B-198839; CODE 105104, 105106)

TEAM LEADERS, NYRO - GERALD T. MAGUIRE, CHARLES K. STEIN:

THIS MEMORANDUM ANSWERS A NUMBER OF QUESTIONS RAISED BY THE NEW YORK REGIONAL OFFICE (NYRO) CONCERNING TWO LOW INCOME ENERGY ASSISTANCE PROGRAMS: THE FISCAL YEAR (FY) 1980 PROGRAM, IN THE FORM OF AN EMERGENCY APPROPRIATION CONTAINED IN PUBLIC LAW 96-126; AND THE FY 1981 PROGRAM, THE HOME ENERGY ASSISTANCE ACT OF 1980, A STATE BLOCK GRANT PROGRAM INCORPORATED INTO THE WINDFALL PROFIT TAX ACT OF 1980 (PUBLIC LAW 96-223).

FY 1980 PROGRAM: QUESTIONS AND CONCLUSIONS

QUESTION 1: DID CONGRESS INTEND ELIGIBILITY FOR DIRECT-PAYMENT ASSISTANCE TO BE DETERMINED SOLELY ON A CATEGORICAL BASIS, OR WAS IT THE INTENTION OF CONGRESS TO LIMIT ELIGIBILITY TO THOSE DIRECTLY RESPONSIBLE FOR ENERGY EXPENDITURES?

ANSWER 1: THE LEGISLATIVE HISTORY OF PUBLIC LAW 96-126 INDICATES THAT CONGRESS INTENDED ELIGIBILITY TO BE DETERMINED SOLELY ON A CATEGORICAL BASIS.

QUESTION 2: MAY SUPPLEMENTAL SECURITY INCOME (SSI) AND AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) RECIPIENTS LIVING IN SUBSIDIZED HOUSING, WHOSE ENERGY COSTS ARE NOT INCLUDED IN THEIR RENT, BE EXCLUDED FROM THIS PROGRAM?

ANSWER 2: NO; THE DIRECT-PAYMENT PORTION OF THE PROGRAM IS AN ACROSS-THE- BOARD BENEFIT FOR ALL RECIPIENTS. ALTHOUGH THE PURPOSE OF THE PROGRAM WAS TO REIMBURSE LOW INCOME INDIVIDUALS FOR INCREASES IN HOME ENERGY COSTS, THE METHOD CHOSEN TO ACHIEVE THAT PURPOSE (CATEGORICAL ELIGIBILITY) MAKES THE ASSUMPTION THAT ALL MEMBERS OF THE CATEGORY PAY FOR INCREASED ENERGY COSTS IN ONE FORM OR ANOTHER.

QUESTION 3: ONCE ELIGIBILITY HAS BEEN ESTABLISHED, MAY USE OF THE PAYMENT BE RESTRICTED TO REIMBURSEMENT OF ENERGY-RELATED COSTS?

ANSWER 3: NO; AGAIN, WHILE THE PURPOSE OF THE PROGRAM IS TO ALLEVIATE ENERGY-RELATED COSTS, THE DIRECT-PAYMENT METHOD CONTAINS NO SUCH USE- RESTRICTION.

FY 1981 PROGRAM: QUESTIONS AND CONCLUSIONS

QUESTION 1: DID CONGRESS INTEND ELIGIBILITY FOR ASSISTANCE UNDER THE FY 1981 PROGRAM TO BE LIMITED TO THOSE RESPONSIBLE (EITHER DIRECTLY OR INDIRECTLY) FOR ENERGY EXPENDITURES?

ANSWER 1: YES; THE WAY THAT THE HOME ENERGY ASSISTANCE ACT DEFINES "ELIGIBLE HOUSEHOLD" LIMITS ASSISTANCE TO THOSE RESPONSIBLE FOR ENERGY EXPENDITURES.

QUESTION 2: MAY HEW (NOW HHS) MANDATE THAT STATE PLANS HAVE PROCEDURES REQUIRING APPLICANT HOUSEHOLDS TO DEMONSTRATE A NEED FOR THE ASSISTANCE?

ANSWER 2: HHS MAY REQUIRE A HOUSEHOLD TO DEMONSTRATE THAT IT IS RESPONSIBLE FOR SOME ENERGY COSTS AND THAT IT IS INCOME ELIGIBLE (OR IS RECEIVING SSI, AFDC, FOOD STAMPS, ETC.). ONCE, HOWEVER, CATEGORICAL ELIGIBILITY AND ENERGY COST-RESPONSIBILITY ARE SHOWN, THE DETERMINATION OF BENEFIT LEVEL (BASED ON NEED) IS A MATTER OF THE STATE'S DISCRETION, LIMITED ONLY BY THE REQUIREMENT THAT THE BENEFIT DISTRIBUTION FORMULA GIVE GREATEST ASSISTANCE TO THOSE WITH LOWEST INCOME AND GREATEST ENERGY COSTS.

QUESTION 3: DOES THE DIRECT-PAYMENT OPTION OF THE ACT (SECTION 308(H) ALLOW HHS TO MAKE ACROSS-THE-BOARD PAYMENTS TO ELIGIBLE HOUSEHOLDS WITHOUT REGARD TO ANY STATE PLAN?

ANSWER 3: PROBABLY NOT. ALTHOUGH NOT ENTIRELY CLEAR FROM THE ACT ITSELF, THE LEGISLATIVE HISTORY INDICATES THAT THE DIRECT-PAYMENT OPTION IS SUBJECT TO STATE SPECIFICATIONS.

A MORE DETAILED ANALYSIS IS ATTACHED.

CONGRESSIONAL INTENT REGARDING FISCAL YEAR 1980 AND FISCAL YEAR 1981 LOW INCOME ENERGY ASSISTANCE PROGRAMS

DIGEST:

1. ELIGIBILITY UNDER PUB. L. NO. 96-126 FOR DIRECT PAYMENT OF LOW INCOME ENERGY ASSISTANCE IN FY 1980 IS DETERMINED SOLELY ON A CATEGORICAL BASIS. NEITHER THE LAW NOR ITS LEGISLATIVE HISTORY INDICATES AN INTENTION BY CONGRESS THAT POTENTIAL RECIPIENTS PROVE RESPONSIBILITY FOR ENERGY COSTS.

2. USE OF FUNDS PROVIDED UNDER PUB. L. NO. 96-126 TO ELIGIBLE INDIVIDUALS UNDER DIRECT-PAYMENT PORTION OF FY 1980 PROGRAM MAY NOT BE RESTRICTED TO ENERGY RELATED COSTS. ALTHOUGH PURPOSE OF PROGRAM WAS TO HELP PAY FOR HOME-ENERGY COST INCREASE, METHOD CHOSEN PLACES NO RESTRICTION ON RECIPIENT'S USE OF FUNDS.

3. ELIGIBILITY UNDER PUB. L. NO. 96-223 (FY 1981 PROGRAM) FOR LOW INCOME ENERGY ASSISTANCE IS LIMITED TO THOSE HOUSEHOLDS RESPONSIBLE FOR HOME ENERGY EXPENDITURES. ONCE ELIGIBILITY IS ESTABLISHED, HEW (NOW HHS) MAY NOT REQUIRE HOUSEHOLDS TO DEMONSTRATE NEED FOR ASSISTANCE, ALTHOUGH STATES MAY REQUIRE SUCH A DEMONSTRATION TO DETERMINE BENEFIT LEVEL.

4. SECTION 308(H) OF PUB. L. NO. 96-223 (FY 1981 PROGRAM), PROVIDING OPTION TO STATES TO ELECT TO HAVE LOW INCOME ENERGY ASSISTANCE FOR SSI- RECIPIENT HOUSEHOLDS COME DIRECTLY FROM HEW (HHS), IS PART OF STATE PLAN AND PROBABLY SUBJECT TO STATE SPECIFICATIONS.

DISCUSSION

I. THE FY 1980 PROGRAM

BACKGROUND: THE FISCAL YEAR (FY) 1980 LOW INCOME ENERGY ASSISTANCE PROGRAM IS CONTAINED IN A SUPPLEMENTAL APPROPRIATION UNDER THE HEADING "COMMUNITY SERVICES PROGRAMS," PUB. L. NO. 96-126, TITLE II, 93 STAT. 978 (1979). AS ENACTED, $1.35 BILLION WAS ALLOCATED AS FOLLOWS:

- $400 MILLION TO SUPPLEMENTAL SECURITY INCOME (SSI) RECIPIENTS AS A ONE- TIME DIRECT ENERGY ALLOWANCE.

- $300 MILLION TO AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) RECIPIENTS, ALSO AS A DIRECT ONE-TIME ALLOWANCE, OR, AT THE STATE'S OPTION, AS A BLOCK GRANT PURSUANT TO AN HEW-APPROVED STATE PLAN.

- $150 MILLION TO THE COMMUNITY SERVICES ADMINISTRATION FOR BLOCK GRANTS, TO ADD TO AN EXISTING $250 MILLION PROGRAM. (FN1)

THE MYRO'S AUDIT IS CONCERNED PRIMARILY WITH THE DIRECT-PAYMENT PORTIONS OF THE PROGRAM (TO SSI AND AFDC RECIPIENTS).

LEGISLATIVE HISTORY: THE FY 1980 PROGRAM ORIGINATED AS AN AMENDMENT BY SENATOR JAVITS TO H.R. 4930, 96TH CONG., 1ST SESS., AN INTERIOR DEPARTMENT APPROPRIATIONS BILL. THE JAVITS AMENDMENT, PASSED BY THE SENATE ON OCTOBER 16, 1979 (125 CONG. REC. S14,645), WOULD HAVE GIVEN $1.2 BILLION DIRECTLY TO THE CSA FOR BLOCK GRANTS TO STATES UNDER AN EXISTING PROGRAM AUTHORIZED BY THE 1978 AMENDMENTS TO THE ECONOMIC OPPORTUNITY ACT OF 1964, 42 U.S.C. SEC. 2761. BY PASSING THE JAVITS AMENDMENT, THE SENATE REJECTED AN ADMINISTRATION PROPOSAL WHEREBY THE $1.2 BILLION WOULD BE TRANSFERED FROM THE COMMUNITY SERVICES ADMINISTRATION TO HEW FOR A DIRECT-PAYMENT PROGRAM FOR SSI AND AFDC RECIPIENTS. PROPOSED SUPPLEMENTAL APPROPRIATIONS AND BUDGET AMENDMENTS FOR FISCAL YEAR 1980, H.R. DOC. NO. 207, 96TH CONG., 1ST SESS. 3 (1979). (FN2)

THE SENATE AMENDMENTS TO H.R. 4930 (INCLUDING THE JAVITS AMENDMENT) WERE REJECTED BY THE HOUSE ON OCTOBER 22, 1979, AND THE BILL WENT TO A CONFERENCE COMMITTEE. MEANWHILE THE HOUSE PASSED A SEPARATE BILL, H.R.J. RES. 430, 96TH CONG., 1ST SESS. (1979), WHICH BASICALLY FOLLOWED THE ENERGY ASSISTANCE PROGRAM FORMAT REQUESTED BY THE ADMINISTRATION.

AT CONFERENCE ON H.R. 4930, THE SENATE CONFEREES AGREED TO RECEDE FROM THE JAVITS AMENDMENT AND THE HOUSE CONFEREES AGREED TO RECEDE FROM H.R.J. RES. 430. THE FINAL VERSION AGREED TO, HOWEVER, BASICALLY FOLLOWED THE ADMINISTRATION VERSION OF H.R.J. RES. 430, WITH A FEW MINOR CHANGES. THE MOST SIGNIFICANT CHANGE WAS THAT STATES WERE GIVEN THE OPTION OF TAKING THE AMOUNT TO BE ALLOCATED TO AFDC RECIPIENTS AS BLOCK GRANTS PURSUANT TO HEW-APPROVED STATE PLANS.

ENERGY COST RESPONSIBILITY: THE LANGUAGE OF PUBLIC LAW 96-126 DOES NOT REQUIRE OR SUGGEST THAT RESPONSIBILITY FOR PAYMENT OF HOME ENERGY COSTS BE CONSIDERED IN THE DIRECT-PAYMENT PORTION OF THE PROGRAM. UNDER THE ACT, THE REQUIREMENTS FOR THE SSI-RECIPIENT PAYMENT PROGRAM ARE ONLY "THAT $400,000,000 SHALL BE PAID AS A SPECIAL ONE-TIME ENERGY ALLOWANCE TO RECIPIENTS OF SUPPLEMENTAL SECURITY INCOME," TO BE DISTRIBUTED TO THE STATES ACCORDING TO A SPECIFIED FORMULA. THE REQUIREMENTS FOR THE DIRECT PAYMENTS TO AFDC RECIPIENTS ARE NOT AT ALL SPELLED OUT IN THE ACT.

THE LEGISLATIVE HISTORY EXPANDS SOMEWHAT ON THE REQUIREMENTS OF THE DIRECT-PAYMENT PROGRAMS, BUT ALSO DOES NOT SPECIFY OR SUGGEST THAT RESPONSIBILITY FOR PAYMENT OF HOME ENERGY COSTS BE CONSIDERED IN DETERMINING EITHER INITIAL ELIGIBILITY OR LEVEL OF PAYMENT. CONFERENCE REPORT ON H.R. 4930, H.R. REP. NO. 96-604, 35 (1979). THE LANGUAGE OF THE CONFERENCE REPORT INDICATES THAT ALTHOUGH THE PURPOSE OF THE BILL IS TO PROVIDE FUNDS TO LOW-INCOME HOUSEHOLDS TO OFFSET RISES IN HOME ENERGY COSTS, ELIGIBILITY FOR THE DIRECT-PAYMENT PORTION OF THE PROGRAM IS BASED SOLELY UPON WHETHER AN INDIVIDUAL RECIPIENT IS AN SSI OR AFDC RECIPIENT. LEVEL OF BENEFIT IS DETERMINED ON A STATE-WIDE BASIS BY A FORMULA DESIGNED TO PREDICT AVERAGE ENERGY COSTS AND NEEDS.

THUS, NEITHER THE ACT ITSELF NOR THE REPORT OF THE CONFERENCE COMMITTEE EVIDENCES AN INTENTION THAT ELIGIBILITY OR LEVEL OF PAYMENT BE BASED ON ENERGY COST RESPONSIBILITY OR INDIVIDUAL PROOF OF NEED. IN ADDITION, AN EXAMINATION OF THE HISTORY OF THE LEGISLATION SHOWS THAT THE ADMINISTRATION PLAN WAS THE BASIS OF THE PROGRAM AS ENACTED, AND THAT THIS PLAN SPECIFICALLY REJECTED SUCH AN INTENTION.

THE ORIGINAL SENATE VERSION OF THE PROGRAM AS PROPOSED BY SENATOR JAVITS, WOULD HAVE GIVEN THE ENTIRE AMOUNT TO THE STATES FOR DISTRIBUTION, LEAVING THE ENERGY COST-RESPONSIBILITY QUESTION TO THE DISCRETION OF THE STATES. SEE 125 CONG. REC. S14,645 (DAILY ED. OCT. 16, 1979). THE ADMINISTRATION PROPOSAL, ON THE OTHER HAND, BASED ELIGIBILITY FOR ENERGY PAYMENTS ON ELIGIBILITY FOR SSI AND AFDC, CONTEMPLATING THAT INDIVIDUALS IN THOSE CATEGORIES WERE IN NEED OF ENERGY ASSISTANCE REGARDLESS OF DIRECT OR INDIRECT RESPONSIBILITY FOR ENERGY COSTS. SECRETARY HARRIS, TESTIFYING FOR THE ADMINISTRATION PLAN BEFORE A SUBCOMMITTEE OF THE HOUSE COMMITTEE ON APPROPRIATIONS, MADE IT CLEAR THAT PAYMENTS TO SSI AND AFDC RECIPIENTS WERE TO BE ON A CATEGORICAL BASIS, WITHOUT THE NEED FOR INDIVIDUAL PROOF OF ENERGY COST RESPONSIBILITY OR NEED:

"MR. MICHAEL *** ARE YOU TALKING ABOUT A STRAIGHT CASH HANDOUT TO AFDC AND SSI RECIPIENTS?

SECRETARY HARRIS: WE ARE PROPOSING IN ADDITION TO THE REGULAR SSI PAYMENTS THAT ARE REGULARLY MADE, AN ADDITIONAL ENERGY COST PAYMENT *** IT WILL BE A PAYMENT TO EVERY SSI BENEFICIARY. WITH RESPECT TO AFDC, IF THE ADMINISTRATION PROPOSAL IS ADOPTED, IT WILL BE MADE TO THOSE WHO ARE ON THE AFDC ROLLS AS OF JANUARY 1 ***

THE ASSUMPTION IS *** THAT THERE WILL BE, AS HAS BEEN CONFIRMED BY EVERY WITNESS BEFORE ME TODAY, FOR EVERY PERSON, BUT PARTICULARLY FOR POOR PEOPLE, UNANTICIPATED INCOME DRAINS AS A RESULT OF EXTRA ENERGY COSTS." URGENT SUPPLEMENTAL APPROPRIATION BILL, 1980 (H.R. 4930): HEARINGS BEFORE A SUBCOMMITTEE OF THE HOUSE COMMITTEE ON APPROPRIATIONS, 96TH CONG. 1ST SESS. 35 (1979). (HEREINAFTER "HEARINGS ON H.R. 4930.")

AS FOR THE QUESTION OF RECIPIENTS WHO ARE NOT DIRECTLY OR INDIRECTLY RESPONSIBLE FOR ENERGY COSTS BECAUSE THEY ARE RESIDENTS OF SUBSIDIZED HOUSING, SECRETARY HARRIS WAS ASKED:

"MR. SMITH: *** HOW ARE YOU GOING TO GET AT THIS PROBLEM OF ONE PERSON WHO LIVES IN HOUSING THAT IS SUBSIDIZED BY A NONPROFIT CORPORATION, AND ONE WAY OR ANOTHER THEY DON'T REALLY INCREASE RENTS?

SECRETARY HARRIS: MAY I RESPECTFULLY SUGGEST THAT HYPOTHETICAL IS NOT REAL. HAVING JUST COME FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT I HEARD CONTINUING COMPLAINTS FROM MOST OF THE TENANTS THAT INDEED ENERGY COSTS ARE PASSED ON **** THERE WILL BE INCREASED COSTS FOR ALL POOR PEOPLE AS A RESULT OF INCREASED ENERGY COSTS. *** THE PROBLEMS OF ELIGIBILITY AND THE IDENTIFICATION OF DIFFERENTIATIONS, WHICH ARE AS SPECIFIC AS THAT, WILL TAKE TIME FOR US TO HANDLE. IF WE INSIST ON THE PERFECT PROGRAM, WE WILL HAVE NO PROGRAM IN TIME FOR THIS WINTER." ID. AT 41.

THE ADMINISTRATION VIEW WAS CLEARLY REFLECTED IN THE HOUSE'S PASSAGE OF H.R.J. RES. 430. THE FLOOR DEBATE INDICATED SOME CONCERN OVER THE CATEGORICAL ELIGIBILITY FOR SSI AND AFDC RECIPIENTS. HOWEVER, AN AMENDMENT TO CUT OUT THE DIRECT RECIPIENT PAYMENTS AND TO ALLOCATE THE ENTIRE $1.35 BILLION TO THE COMMUNITY SERVICES ADMINISTRATION FOR BLOCK GRANTS TO STATES WAS REJECTED AND THE ADMINISTRATION VERSION PASSED THE HOUSE. SEE 125 CONG. REC. H9,728 (DAILY ED. OCT. 25, 1979).

IN SUM, THE STATUTORY LANGUAGE OF PUBLIC LAW 96-126 CONTAINS NO REQUIREMENT THAT DIRECT-PAYMENT BENEFICIARIES BE RESPONSIBLE FOR ENERGY COSTS. IN ADDITION, THE ADMINISTRATION PLAN SPECIFICALLY DISCLAIMED SUCH A REQUIREMENT. THE FACT THAT THE ADMINISTRATION PLAN (AND NOT THE JAVITS VERSION) PREVAILED IN THE CONFERENCE COMMITTEE AND ULTIMATELY WAS ENACTED (SEE 125 CONG. REC. S16,428 (DAILY ED. NOV. 9, 1979)) REQUIRES THE CONCLUSION THAT THE FY 1980 DIRECT ENERGY ASSISTANCE PAYMENTS WERE INTENDED BY THE CONGRESS TO BE MADE ON A CATEGORICAL ELIGIBILITY BASIS, WITH NO CONSIDERATION GIVEN TO ENERGY-COST RESPONSIBILITY OR INDIVIDUAL PROOF OF NEED.

RESTRICTIONS ON RECIPIENT USE OF FUNDS: THE JAVITS AMENDMENT TO H.R. 4930 CLEARLY CONTEMPLATED THAT THE IMPLEMENTING PROGRAM RESTRICT PAYMENTS IN A WAY THAT ONLY HOME-ENERGY COSTS BE REIMBURSED. IN TESTIMONY BEFORE A SUBCOMMITTEE OF THE HOUSE APPROPRIATIONS COMMITTEE THE SAME DAY THAT THE AMENDMENT PASSED THE SENATE, SENATOR JAVITS WAS ASKED WHETHER PAYMENTS COULD BE USED FOR PURPOSES OTHER THAN FOR HOME ENERGY COSTS. SENATOR JAVITS STATED UNEQUIVOCALLY THAT, UNDER HIS PLAN, PAYMENTS COULD BE USED ONLY FOR HOME HEATING PURPOSES. HEARINGS ON H.R. 4930 AT 21. THE ADMINISTRATION CLEARLY HAD A DIFFERENT VIEW. IN TESTIMONY AT THOSE SAME HEARINGS, SECRETARY HARRIS WAS ASKED:

"MR. MICHAEL: HOW DO BOTH OF THOSE RECIPIENT GROUPS (AFDC AND SSI) SPECIFY USE? IS THERE ANY PROHIBITION ON THE PART OF THIS RECIPIENT USING THIS MONEY FOR ANYTHING THEY WANT TO?

SECRETARY HARRIS: NO, THERE IS NO RESTRICTION ON THE USE OF THE MONEY. THE CHECK GOES AS DO AFDC CHECKS AND AS DO SSI CHECKS, AS INCOME TO THEM." ID. AT 35.

BECAUSE THE ADMINISTRATION SUCCEEDED IN GETTING APPROVAL OF ITS VERSION OF THE PROGRAM, AND BECAUSE NEITHER THE ACT ITSELF NOR THE CONFERENCE REPORT PROVIDE FOR RESTRICTIONS ON RECIPIENT USE OF FUNDS, SUCH RESTRICTIONS WOULD CLEARLY BE INAPPROPRIATE.

II. THE FY 1981 PROGRAM

BACKGROUND: THE FY 1981 PROGRAM CONSISTS OF THE HOME ENERGY ASSISTANCE ACT OF 1980, ("THE ACT") PUB. L. NO. 96-223, TITLE III, 94 STAT. 229 (APRIL 2, 1980) (TO BE CODIFIED AT 42 U.S.C. SEC. 8600 ET. SEQ.). THE ACT CREATES A PROGRAM OF GRANTS TO STATES FOR THE PURPOSE OF PROVIDING HOME ENERGY ASSISTANCE PAYMENTS TO LOW-INCOME INDIVIDUALS PURSUANT TO STATE PLANS. STATE PLANS ARE TO FOLLOW GUIDELINES SET OUT IN REGULATIONS TO BE PROMULGATED BY HEW (NOW HHS). ALTHOUGH PLANS MUST FOLLOW THE GENERAL HEW GUIDELINES, THE STATES ARE LEFT A GREAT DEAL OF DISCRETION AS TO HOW TO DISTRIBUTE THE BENEFITS UNDER THE ACT. STATES ARE ALSO GIVEN THE OPTION UNDER SECTION 308(H) OF THE ACT TO HAVE PAYMENTS TO HOUSEHOLDS RECEIVING SSI BENEFITS MADE DIRECTLY BY HEW.

ELIGIBILITY FOR BENEFITS UNDER SECTION 305 IS LIMITED TO HOUSEHOLDS IN WHICH ONE OR MORE INDIVIDUALS ARE ELIGIBLE FOR AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC), SUPPLEMENTAL SECURITY INCOME (SSI), FOOD STAMPS, OR CERTAIN VETERANS BENEFITS, OR HOUSEHOLDS WITH INCOME LEVELS BELOW THOSE SET OUT IN THE AFDC PROGRAM. INDIVIDUALS IN INSTITUTIONS FOR WHOM MEDICAID PAYS OVER 50% OF COSTS ARE AUTOMATICALLY EXCLUDED. OTHERWISE, PERSONS IN INSTITUTIONS ARE NOT PER SE EXCLUDED, BUT MAY BE EXCLUDED BECAUSE THEY ARE NOT RESPONSIBLE FOR ENERGY COSTS. SEE DISCUSSION BELOW UNDER "ENERGY COST RESPONSIBILITY."

FUNDS ARE ALLOCATED TO STATES ACCORDING TO A FORMULA SET OUT IN SECTION 306 OF THE ACT. BENEFIT LEVELS TO INDIVIDUALS ARE TO BE DETERMINED BY THE STATE; ONE MAJOR LIMITATION ON THE STATE'S DISCRETION TO DETERMINE BENEFIT LEVELS, HOWEVER, IS THE REQUIREMENT IN SECTION 308(B)(6) THAT SUCH LEVELS ASSURE THAT THOSE HOUSEHOLDS WITH LOWEST INCOME AND HIGHEST ENERGY COSTS IN RELATION TO INCOME RECEIVE A GREATER BENEFIT THAN OTHERS.

BENEFITS MAY TAKE THE FORM OF DIRECT CASH OR VOUCHER PAYMENTS TO HOUSEHOLDS, PAYMENTS TO ENERGY SUPPLIERS ON BEHALF OF HOUSEHOLDS, PAYMENTS TO OPERATORS OF SUBSIDIZED HOUSING IN CERTAIN INSTANCES (SEE BELOW), OR PAYMENT IN KIND (IN THE FORM OF FUEL DELIVERIES, ETC.).

LEGISLATIVE HISTORY: ENACTED AS PART OF THE CRUDE OIL WINDFALL PROFIT TAX ACT OF 1980, THE HOME ENERGY ASSISTANCE ACT OF 1980 ORIGINATED IN THE SENATE AS A SEPARATE BILL, S. 1724, 96TH CONG. 1ST SESS. (1979). THIS BILL, REPORTED TO BUT NEVER PASSED BY THE SENATE, WAS INCORPORATED WITH FEW CHANGES INTO THE SENATE AMENDMENTS TO H.R. 3919, THE WINDFALL PROFIT TAX BILL. ALTHOUGH THE SENATE AMENDMENTS WERE REJECTED BY THE HOUSE, THE HOME ENERGY ASSISTANCE PART OF THE BILL AS REPORTED BY THE CONFERENCE COMMITTEE WAS ALMOST IDENTICAL TO S. 1724, EXCEPT WITHOUT THE PROVISIONS IN THE LATTER BILL FOR A FY 1980 PROGRAM.

ENERGY COST-RESPONSIBILITY: THE NYRO REQUESTED AN OPINION AS TO WHETHER THE ACT DEFINES ELIGIBILITY ON A STRICTLY CATEGORICAL BASIS (AS DID THE FY 1980 PROGRAM) OR WHETHER CONGRESS INTENDED PAYMENTS TO GO ONLY TO THOSE WHO PAY, EITHER DIRECTLY OR INDIRECTLY THROUGH RENT, THE INCREASED COSTS OF HOME HEATING. AN EXAMINATION OF THE ACT AND ITS LEGISLATIVE HISTORY INDICATES THAT CONGRESS DID INTEND ELIGIBILITY TO BE DETERMINED ON A CATEGORICAL BASIS. THE CATEGORIES ARE DRAWN, HOWEVER, IN SUCH A WAY AS TO EXCLUDE THOSE WHO ARE NOT RESPONSIBLE FOR HOME ENERGY COSTS (FOR EXAMPLE CERTAIN RESIDENTS OF SUBSIDIZED HOUSING WHOSE RENT DOES NOT REFLECT ENERGY COSTS). THIS INTERPRETATION OF THE ACT IS ALSO REFLECTED IN THE REGULATIONS IMPLEMENTING THE ACT, RECENTLY PROMULGATED BY THE SOCIAL SECURITY ADMINISTRATION'S OFFICE OF FAMILY ASSISTANCE 45 FED. REG. 36,810 (1980) (TO BE CODIFIED IN 45 C.F.R. PART 260). THESE REGULATIONS REQUIRE HOUSEHOLDS TO BE "VULNERABLE TO ENERGY COST INCREASES" (SEE, E.G., PROPOSED 45 C.F.R. SEC. 260.152(D), 45 FED. REG. AT 36,630) OR "ECONOMICALLY AT RISK FOR RISING COSTS OF HOME ENERGY" (SEE PREAMBLE TO 45 C.F.R. PART 260, 45 FED. REG. AT 36,816) IN ORDER TO BE ELIGIBLE FOR BENEFITS.

IT IS CLEAR FROM THE STATUTORY LANGUAGE AND THE LEGISLATIVE HISTORY THAT THE CONGRESS INTENDED ELIGIBILITY TO BE DETERMINED ON A CATEGORICAL BASIS. THE REPORT OF THE SENATE COMMITTEE ON LABOR AND HUMAN RESOURCES ACCOMPANYING THE ORIGINAL BILL, S. 1724, STATED:

"THE COMMITTEE INCLUDES CATEGORICAL ELIGIBILITY FOR HOUSEHOLDS ELIGIBLE FOR ASSISTANCE UNDER SUPPLEMENTAL SECURITY INCOME, FOOD STAMPS, APDC, OR UNDER SECTIONS 415, 521, 541, OR 542 OF TITLE 38, U.S.C. ***. THESE PROGRAMS ARE ALL NEEDS BASED, AND HOUSEHOLDS ELIGIBLE FOR THESE PROGRAMS ARE OVERWHELMINGLY AT OR BELOW THE BUREAU OF LABOR STATISTICS LOWER LIVING STANDARD INCOME. THEREFORE, ESTABLISHING A CATEGORICALLY ELIGIBLE POPULATION WILL NOT EXPAND THE ELIGIBLE POPULATION BUT WILL DECREASE THE ADMINISTRATIVE BURDEN OF CERTIFYING INCOME AND ELIGIBILITY." S. REP. NO. 96-378, 10 (1979).

THE REPORT OF THE SENATE FINANCE COMMITTEE ON H.R. 3919, S. REP. NO. 96-394, 110 (1979) STATES THAT A CATEGORICAL ELIGIBILITY SCHEME WAS CHOSEN BECAUSE "IT IS CLEAR THAT ALL LOW-INCOME HOUSEHOLDS HAVE SUFFERED FROM THE IMPACT OF RISING ENERGY COSTS." S. REP. NO. 96-394 AT 112. (FN3)

WHAT SETS THE FY 1981 PROGRAM APART FROM THE CATEGORICAL ELIGIBILITY REQUIREMENTS OF THE FY 1980 PROGRAM, HOWEVER, IS THE UNIT FOR WHICH BENEFITS ARE INTENDED. ELIGIBILITY FOR THE FY 1980 PROGRAM WAS TO BE DETERMINED ON AN INDIVIDUAL BASIS; FOR THE FY 1981 PROGRAM, THE UNIT IS THE "HOUSEHOLD." THIS IS A SIGNIFICANT CHANGE, AS HOUSEHOLD IS DEFINED IN SUCH A WAY AS TO RESTRICT PAYMENTS TO THOSE INDIVIDUALS WHO ARE RESPONSIBLE, IN ONE WAY OR ANOTHER, FOR PAYMENT OF RISING HOME ENERGY COSTS.

SECTION 303(1) OF THE ACT DEFINES HOUSEHOLD AS "ANY INDIVIDUAL OR GROUP OF INDIVIDUALS WHO ARE LIVING TOGETHER AS ONE ECONOMIC UNIT FOR WHOM RESIDENTIAL ENERGY IS CUSTOMARILY PURCHASED IN COMMON OR WHO MAKE UNDESIGNATED PAYMENTS FOR ENERGY IN THE FORM OF RENT." THE PHRASE "FOR WHOM RESIDENTIAL ENERGY IS CUSTOMARILY PURCHASED IN COMMON" COULD CONCEIVABLY INCLUDE THOSE HOUSEHOLDS FOR WHOM ENERGY IS PURCHASED BY ANOTHER (I.E., BY GOVERNMENT SUBSIDY). HOWEVER, THE LEGISLATIVE HISTORY OF THE ACT STRONGLY SUGGESTS THAT THE DEFINITION OF "HOUSEHOLD" SHOULD BE READ AS EXCLUDING THOSE NOT DIRECTLY OR INDIRECTLY RESPONSIBLE FOR ENERGY COSTS.

THE REPORT OF THE SENATE COMMITTEE ON LABOR AND HUMAN RESOURCES ON THE ORIGINAL BILL (S. 1724) SPELLS OUT THE WAY IN WHICH CONGRESS INTENDED TO LIMIT THE DEFINITION OF "HOUSEHOLD":

"THE BASIC CRITERION DEFINING A HOUSEHOLD IS THE MANNER IN WHICH RESIDENTIAL ENERGY IS PURCHASED; THE UNIT THAT PURCHASES RESIDENTIAL ENERGY, EITHER DIRECTLY OR THROUGH ITS RENT, IS THE HOUSEHOLD." S. REP. NO. 96-378, B (1977).

THUS, ENERGY COST RESPONSIBILITY IS TIED INTO THE DEFINITION OF "HOUSEHOLD."

THE COMMITTEE REPORT FURTHER STATES THAT THE DEFINITION OF HOUSEHOLD IS INTENDED TO BE COMPARABLE TO THE DEFINITION OF HOUSEHOLD UNDER THE FOOD STAMP PROGRAM, 7 U.S.C. SEC. 2011 ET. SEQ. (SUPP. 1980). IN THE LATTER PROGRAM, THE PRIMARY CRITERION DEFINING A HOUSEHOLD IS THE UNIT RESPONSIBLE FOR PURCHASING FOOD FOR HOME CONSUMPTION, EITHER FOR HOME PREPARATION OR ALREADY PREPARED MEALS, 7 U.S.C. SEC. 2011(I)(SUPP. 1980).

ONE MAJOR CONCERN OF THE NYRO IS THAT THIS INTERPRETATION OF THE STATUTE (I.E., THAT ELIGIBILITY BY DEFINITION IS TIED TO A REQUIREMENT OF ENERGY COST-RESPONSIBILITY) APPEARS TO BE INCOMPATIBLE WITH SECTION 308(B)(3)(B) OF THE ACT, WHICH MAKES PROVISION FOR PAYMENTS TO BE MADE TO CERTAIN OPERATORS OF GOVERNMENT-SUBSIDIZED PUBLIC HOUSING, RESIDENTS OF WHICH DO NOT PAY FOR ENERGY IN THEIR RENT. THIS CONCERN HAS BEEN TAKEN CARE OF BY THE WORDING OF SECTION 308(B)(3)(B), WHICH ALLOWS PAYMENTS TO OPERATORS ONLY FOR THOSE TENANTS WHO ARE "ELIGIBLE," THAT IS, WHO ARE MAKING UNDESIGNATED PAYMENTS FOR ENERGY AS RENT. OPERATORS, THEREFORE, MAY NOT BE REIMBURSED FOR TENANTS WHO ARE NOT RESPONSIBLE FOR PAYMENT OF ENERGY COSTS. (FN4)

THUS, IT WOULD APPEAR FROM THE WORDING OF THE STATUTE AND ITS LEGISLATIVE HISTORY THAT ENERGY COST-RESPONSIBILITY IS A THRESHOLD REQUIREMENT FOR BENEFIT ELIGIBILITY.

DEMONSTRATION OF NEED: THE NYRO IS ALSO CONCERNED WITH WHETHER, ONCE CATEGORICAL ELIGIBILITY IS ESTABLISHED, HEW MAY REQUIRE STATE PLANS TO INCLUDE PROVISIONS FOR ENERGY ASSISTANCE APPLICANTS TO PROVE A DEFINITE NEED FOR THE BENEFITS GIVEN.

THE POINT OF CONFUSION APPEARS TO BE SECTION 308(B)(6), WHICH REQUIRES ALL STATE PLANS TO ASSURE THAT:

"THE HIGHEST LEVEL OF ASSISTANCE IS PROVIDED TO HOUSEHOLDS WITH LOWEST INCOMES AND THE HIGHEST ENERGY COSTS IN RELATION TO INCOME, TAKING INTO ACCOUNT - *** (II) THE PROPORTIONAL BURDEN OF ENERGY COSTS IN RELATION TO RANGES OF INCOME *** AND (IV) ANY OTHER RELEVANT CONSIDERATION SELECTED BY THE CHIEF EXECUTIVE ***."

IT IS CLEAR FROM THE STRUCTURE OF THE ACT, DISCUSSIONS IN VARIOUS COMMITTEE REPORTS, AS WELL AS DISCUSSIONS ON THE FLOOR OF THE SENATE THAT THIS PROVISION REFERS SOLELY TO LEVEL OF BENEFITS GIVEN TO ELIGIBLE INDIVIDUALS, RATHER THAN TO ELIGIBILITY ITSELF. ONCE CATEGORICAL ELIGIBILITY AND ENERGY COST RESPONSIBILITY ARE SHOWN (PROOF OF WHICH MAY BE REQUIRED BY HEW PURSUANT TO SECTION 308(B)(4)), NEED FOR SOME BENEFIT IS ASSUMED (SEE DISCUSSION OF CATEGORICAL ELIGIBILITY ABOVE).

IT WAS INTENDED BY CONGRESS THAT THE FINAL DISTRIBUTION OF BENEFITS WAS TO BE DECIDED BY THE STATES. AS STATED IN THE SENATE REPORT ON S. 1724:

"THERE WAS ALSO GENERAL AGREEMENT, WITH FEW EXCEPTIONS, THAT THE BASIC PROGRAM DESIGN OF ANY HOME ENERGY ASSISTANCE PROGRAM SHOULD PROVIDE A STATE GRANT PROGRAM WITH AMPLE DISCRETIONARY AUTHORITY TO BE GIVEN TO THE GOVERNORS TO DECIDE HOW BEST TO AFFORD RELIEF TO ITS RESIDENTS." S. REP. NO. 96-378, 5 (1979).

HOW WIDE THAT DISCRETION WAS TO BE, HOWEVER, WAS A MATTER OF DEBATE. SECTION 308(B)(6) WAS INCLUDED TO REQUIRE SOME SORT OF NEEDS BASED FORMAT FOR THE STATES TO FOLLOW. DURING THE FLOOR DEBATE, AN AMENDMENT BY SENATOR HUMPHREY (N.H.) TO SIMPLIFY THE STATE PLAN REQUIREMENTS BY DELETING SECTION 308(B)(6) WAS DEFEATED. 125 CONG. REC. S. 16539 (DAILY ED. NOV. 13, 1979). DURING THE DEBATE, SENATOR WILLIAMS COMMENTED THAT "IT IS CERTAINLY THE INTENT OF THIS LEGISLATION THAT THE AMOUNT OF ASSISTANCE BE BASED ON NEED." ID. AT S. 16538.

IT IS DOUBTFUL THAT THIS REQUIREMENT OF "BASED ON NEED" GIVES HEW AUTHORITY TO REQUIRE ELIGIBLE HOUSEHOLDS TO DEMONSTRATE THE EXACT AMOUNT OF NEED. GIVEN THE WIDE AMOUNT OF DISCRETION AFFORDED TO THE STATE, HOWEVER, THE STATE ITSELF COULD PROBABLY INSIST UPON SUCH A DEMONSTRATION. WHAT CONGRESS MEANT BY THIS REQUIREMENT IS CLARIFIED BY THE EXAMPLES OF POSSIBLE STATE SCHEMES GIVEN IN THE SENATE REPORT ON S. 1724, INCLUDING A GRID MODEL AND A SLIDING INCOME SCALE MODEL, WHERE FACTORS OF INCOME LEVEL, SIZE OF FAMILY, STATE REGION, AND AVERAGE ENERGY COST PER STATE REGION ARE ALL USED. S. REP. NO. 96-378, 17 (1979). SUCH A NEEDS-BASED SCHEME WAS INCORPORATED INTO THE OFA'S RECENT REGULATIONS IMPLEMENTING THE ACT. PROPOSED 45 CFR SEC. 260.154 45 FED. REG. 36,830 (1980); SEE ALSO PROPOSED 45 C.F.R. PART 260, APPENDIX C, 45 FED. REG. 36,837 (1980).

DIRECT PAYMENT OPTION: THE FINAL CONCERN SPECIFIED BY THE NYRO IS WHETHER A STATE'S USE OF SECTION 308(H) OF THE ACT COULD CREATE SOME OF THE PROBLEMS WHICH OCCURRED IN THE FY 1980 PROGRAM. SECTION 308(H) GIVES STATES THE OPTION OF HAVING THE SECRETARY OF HEW RESERVE ANY PORTION OF THE STATE'S ALLOTMENT FOR DIRECT PAYMENT TO ELIGIBLE HOUSEHOLDS RECEIVING SSI ASSISTANCE. THE QUESTION HERE IS WHETHER THIS OPTION SHOULD BE TREATED AS SIMPLY A FEATURE WITHIN THE STATE PLAN (AND SUBJECT TO STATE DISTRIBUTION REQUIREMENTS) FOR ADMINISTRATIVE CONVENIENCE, OR WHETHER THIS OPTION CREATES A NEW ELIGIBILITY CATEGORY NOT UNLIKE THE DIRECT SSI PAYMENTS IN THE FY 1980 PLAN. THE OFFICE OF FAMILY ASSISTANCE IN ITS PROPOSED REGULATIONS HAS CHOSEN TO FOLLOW THE FIRST INTERPRETATION. ALTHOUGH THIS PROVISION OF THE ACT IS NOT CLEAR ON ITS FACE, THE LEGISLATIVE HISTORY INDICATES THAT SUCH AN INTERPRETATION IS CORRECT.

THE DIRECT PAYMENT OPTION OF SECTION 308(H) WAS NOT INCLUDED IN THE ORIGINAL SENATE BILL, S. 1724, BUT WAS ADDED BY THE CONFERENCE COMMITTEE ON H.R. 3919. H.R. REP. NO. 96-817, 154 (1980). THE CONFERENCE REPORT PLAINLY STATES THAT STATES ARE TO SUBMIT SPECIFICATIONS FOR THE DIRECT PAYMENTS TO HEW, ALTHOUGH SUCH SPECIFICATIONS MUST TAKE INTO ACCOUNT THE DATA-HANDLING LIMITATIONS OF THE SSI PAYMENT SYSTEM (THE MOST SIGNIFICANT DRAWBACK TO SUCH A SYSTEM BEING THAT SSI PAYMENTS DO NOT TAKE INTO ACCOUNT TYPES OF LIVING ARRANGEMENTS). ID.

THE DIRECT PAYMENT OPTION WOULD THUS APPEAR TO BE A PART OF THE STATE PLAN AND THEREFORE SUBJECT TO STATE PLAN LIMITATIONS, INCLUDING THE REQUIREMENT OF ENERGY COST-RESPONSIBILITY. THIS CONCLUSION IS SUPPORTED BY THE FACT THAT ELIGIBILITY UNDER THE DIRECT PAYMENT OPTION IS AGAIN LIMITED TO "HOUSEHOLDS." BECAUSE ELIGIBILITY IS BASED ON ENERGY COST- RESPONSIBLE "HOUSEHOLDS," RATHER THAN INDIVIDUAL "RECIPIENTS," THERE WILL BE SIGNIFICANT PROBLEMS IN ADOPTING THE SSI DATA TO PROVIDE FOR THE OPTION. IF, HOWEVER, THE DATA CAN BE SO ADOPTED, THE REQUIREMENT OF COST- RESPONSIBILITY SHOULD PROTECT THE SCHEME FROM SOME OF THE PROBLEMS ASSOCIATED WITH THE FY 1980 PROGRAM. FN1 THE ABOVE DISTRIBUTION IS MOST CLEARLY SET OUT IN THE LEGISLATIVE HISTORY OF THE APPROPRIATION. SEE 125 CONG. REC. H10,509 (DAILY ED. NOV. 9, 1979) (REMARKS OF REP. YATES). THE ACT ITSELF APPROPRIATES $150 MILLION FOR THE COMMUNITY SERVICES ADMINISTRATION AND $1.2 BILLION FOR HEW (FOR BOTH BLOCK GRANT AND DIRECT- PAYMENT PROGRAMS). THE LANGUAGE OF THE APPROPRIATION IS COMPLICATED BY DIFFERENT DISTRIBUTION PLANS: $400 MILLION TO STATES UNDER ONE PLAN FOR DIRECT PAYMENT TO SSI RECIPIENTS; THE REMAINING $950 MILLION, LESS ADMINISTRATION COSTS, TO BE DISTRIBUTED BY ANOTHER FORMULA.

FN2 THE ADMINISTRATION PROPOSAL ALSO INCLUDED AN ADDITIONAL $150 MILLION FOR THE COMMUNITY SERVICES ADMINISTRATION, (FOR A TOTAL OF $1.35 BILLION) TO ADD TO A THEN-EXISTING $250 MILLION PROGRAM FOR BLOCK GRANTS TO STATES (UNDER SEC. 222(A)(5) OF THE ECONOMIC OPPORTUNITY ACT OF 1964 AS AMENDED, 42 U.S.C. SEC. 1701 ET. SEQ.). THIS PROGRAM, ADMINISTERED ACCORDING TO STATE PLANS FOLLOWING BROAD COMMUNITY SERVICES ADMINISTRATION GUIDELINES, WAS THE PROGRAM TO WHICH SENATOR JAVITS WISHED TO SEE THE ENTIRE $1.2 BILLION APPROPRIATION GO.

FN3 ELIGIBILITY DOES NOT MEAN, HOWEVER, THAT A BENEFIT IS AUTOMATICALLY GRANTED. THE STATE HAS THE DISCRETION TO STRUCTURE BENEFITS IN SUCH A WAY THAT LESS NEEDY ELIGIBLE HOUSEHOLDS MAY RECEIVE FEWER BENEFITS, TO THE ADVANTAGE OF MORE NEEDY HOUSEHOLDS. AS REPORTED BY THE CONFERENCE COMMITTEE ON H.R. 3919: "WE ALSO WISH TO MAKE CLEAR THAT A STATE IS NOT REQUIRED, UNDER ITS PLAN, TO PROVIDE A BENEFIT TO EVERY HOUSEHOLD DEFINED AS AN ELIGIBLE HOUSEHOLD UNDER THIS TITLE." H.R. REP. NO. 96-817, 154 (1980).

FN4 UNDER THE ACT, THE AMOUNT OF PAYMENT TO SUBSIDIZED-HOUSING OPERATORS IS TO BE COMPUTED BY MULTIPLYING THE AVERAGE ENERGY COST PER TENANT (TOTAL AMOUNT PAID FOR ENERGY DIVIDED BY TOTAL NUMBER OF TENANTS) BY THE TOTAL NUMBER OF "ELIGIBLE" TENANTS, NOT TO EXCEED THE AVERAGE DIRECT PAYMENT TO OTHER ELIGIBLE HOUSEHOLDS.