1. (a) Except for the reobligation of deobligated funds, the Department distributes funds to Subrecipients by an allocation formula.

2. (b) The allocation formula allocates funds based on the number of Low Income Households in a service area and takes into account certain special needs of individual service areas, as set forth below. 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--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--The number of Elderly Poverty Households in the county divided by the number of Elderly Poverty Households in the State;

   3. (3) County Inverse Household Population Density Factor--

      1. (A) The number of square miles of the county divided by the number of Households of the county (equals the inverse Household population density of the county); and
      2. (B) Inverse Household Population density of the county divided by the sum of inverse Household densities.

   4. (4) County Median Income Variance Factor--

      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--

      1. (A) County heating degree days plus the county cooling degree days, multiplied by the poverty Households, divided by the sum of county heating and 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%), number of poverty Households with at least one member who is 60 years of age or older (40%), Household density as an inverse ratio (5%), the median income of the county (5%), and a weather factor based on heating degree days and cooling degree days (10%). All demographic factors are based on the most current decennial U.S. Census. The formula is as follows:

         1. (i) County Non-Elderly Poverty Household Factor (0.40) plus;
         2. (ii) County Elderly Poverty Household Factor (0.40) plus;
         3. (iii) County Inverse Household Population Density Factor (0.05) plus;
         4. (iv) County Median Income Variance Factor (0.05) plus;
         5. (v) County Weather Factor (0.10);
         6. (vi) Total sum of clauses (i) - (v) of this subparagraph multiplied by total funds allocation equals the county's allocation of funds.
         7. (vii) The sum of the county allocation within each Subrecipient service area equals the Subrecipient's total allocation of funds.
3. (c) To the extent that Contract funds have been deobligated, or should additional funds become available, those funds will be allocated using this formula or other method approved by the Department's Board to ensure full utilization of funds within a limited timeframe, including possible allocation of WAP funds to Subrecipients in varying populations from each funding source (DOE and LIHEAP), based on availability of the source.
4. (d) Subrecipients that do not expend more than 20% of Program Year formula allocation (excluding any additional funds that may be distributed by the Department) by the end of the first quarter of the year following the Program Year for two consecutive years will have funding recaptured. LIHEAP-WAP funding recapture will be consistent with Chapter 2105. The Subrecipient of the funds will be provided a Contract for the average percentage of funds that they expended over the last two years.
5. (e) The cumulative balance of the funds made available through subsections (d) above will be allocated proportionally by formula to the entities that expended 90% of the prior year's Contract by the end of the original Contract Term.
6. (f) To the extent federal funding awarded to Texas is limited from one of the two WAP funding sources, possible allocations of funds to Subrecipients may be made in varying proportions from each source to maximize efficient program administration.
7. (g) The Department may, in the future, undertake to reprocure the Subrecipients that comprise the network of Weatherization providers, in which case this allocation formula will be reassessed and, if material changes are needed, amended by rulemaking.

Source Note:The provisions of this §6.404 adopted to be effective December 4, 2016, 41 TexReg 9270.