1. (a) The Department distributes funds to subrecipients by an allocation formula.

2. (b) This funding formula was developed with input from subrecipients. This formula allocates funds based on the number of low-income households in a service area and takes into account the special needs of individual service areas. The need for energy assistance in an area is addressed through a weather factor (based on heating and cooling degree days). The extra expense in delivering services in sparsely populated areas is addressed by an inverse population density factor. The lack of additional services available in very poor counties is addressed by a county median income factor. Finally, the elderly are given priority by giving greater weight to this population. The five factors used in the formula are calculated as follows:

   1. (1) County Non-elderly Poverty Household Factor is defined as the number of Non-elderly Poverty Households in the County divided by the number of Non-elderly Poverty Households in the State.
   2. (2) County Elderly Poverty Household Factor is defined as the number of Elderly Poverty Households in the County divided by the number of Elderly Poverty Households in the State.

   3. (3) County Inverse Poverty Household Density Factor is defined as:

      1. (A) The number of Square Miles of the County divided by the number of Poverty Households of the County (equals the Inverse Poverty Household Density of the County); and
      2. (B) Inverse Poverty Household Density of the County divided by the Sum of Inverse Household Densities.

   4. (4) County Median Income Variance Factor is defined as:

      1. (A) State Median Income minus the County Median Income (equals County Variance); and
      2. (B) County Variance divided by sum of the State County Variances;

   5. (5) County Weather Factor is defined as:

      1. (A) County Heating Degree Days plus the County Cooling Degree Days, multiplied by the Poverty Households, divided by the sum of County Heating & Cooling Degree Days of Counties (equals County Weather); and
      2. (B) County Weather divided by the total sum of the State County Weather.

3. (c) The five factors carry the following weights in the allocation formula: number of non-elderly poverty households (40 percent), number of poverty households with at least one member who is 65 years of age or older (40 percent), household density as an inverse ratio (5 percent), the median income of the county (5 percent), and a weather factor based on Heating Degree Days and Cooling Degree Days (10 percent). All demographic factors are based on the 2000 U.S. Census. The formula is as follows:

   1. (1) County Non-elderly Poverty Household Factor (0.40) plus;
   2. (2) County Elderly Poverty Household Factor (0.40) plus;
   3. (3) County Inverse Poverty Household Density Factor (0.05) plus;
   4. (4) County Median Income Variance Factor (0.05) plus;
   5. (5) County Weather Factor (0.10);
   6. (6) Total sum of paragraph (1)-(5) of this subsection multiplied by total funds allocation equals the County's allocation of funds.
   7. (7) The sum of the county allocation within each subrecipient service area equals the subrecipient's total allocation of funds.
4. (d) Periodically, the Department must shift resources from low-demand regions to high-demand regions of the state. During the sixth month of the program year, the Department will conduct an in-house performance review of all subrecipients. The performance review will include individual subrecipient expenditure rate and households served as specified in the contract of each subrecipient. Based on the review, the Department may deobligate funds from low performing subrecipients and award the funds to high performing subrecipients. Additional DOE funds received during a program year, beyond the regular grant allocation, may be allocated to subrecipients based upon documented need.
5. (e) The Department is permitted by 10 CFR §440.18, to obligate an additional five (5) percent of DOE-WAP administrative funds to subrecipient DOE-WAP budgets less than $350,000. In addition to the DOE funds, the Department utilizes Low Income Home Energy Assistance Program (LIHEAP) funds to provide weatherization services. The Department offsets the funds between DOE and LIHEAP budget awards to allow each subrecipient to receive the maximum allowable administrative funds. Using the distribution formula, the Department makes the corresponding adjustments between the DOE and LIHEAP subrecipient budgets to insure the distribution of funds is appropriately distributed by formula.

Source Note:The provisions of this §6.3 adopted to be effective April 1, 2007, 32 TexReg 1728.