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the FPL. In 2001, the minimum requirement was raised to 21 percent (21 percent of the FPL fora family of one is $167 as of April 1, 2005). 5 The CIHCP counties were also allowed to provideadditional services or to provide services to individuals at higher income levels, however, initiallythey had no requirement to do so. 6 Application processes and procedures are now consistentwith the procedures used to determine eligibility in the TANF program. 7Hospital districts and public hospitals get their money from several sources: 1) local taxes (advalorem, sales and use); 2) the state Tertiary Care Fund; 3) private paying individuals; 4) thirdparty payers; 5) a portion of tobacco settlement resources; and 6) two federal programs — DSHand GME. Counties served wholly or in part by a CIHCP are eligible for state matching funds.To be eligible for the matching funds, these counties must first spend a set percentage of theirgeneral revenue tax levy (GRTL), originally 10 percent, on health care for indigent persons. 8House Bill 1398In 1999, the Indigent Health Care Act was amended by HB 1398. HB 1398 reduced the amounta county must spend on their CIHCP from 10 percent to 8 percent of GRTL before being eligiblefor state assistance funds to pick up much of their subsequent costs. The state reimbursementrate is 90 cents for each dollar spent. Additionally, HB 1398 removed the disincentive to providecare to individuals at higher income levels by allowing counties to receive “credit” for theseexpenditures in order to draw down the state match funds. Counties can now also receivecredit for services deemed to be cost effective, but not necessarily on the list of required basichealth care services. These provisions gave counties more flexibility, added an accountabilitymechanism and afforded financial incentives to provide health care to the medically indigent. 9In 2003, state legislators approved a $1.6 million per year (2004-2005 biennium) reduction instate matching funds available to counties who spend over the required 8 percent of GTRL.The appropriation for each year of the biennium was $5.6 million, whereas, in 2002, the 25counties receiving the state matching funds received a combined total of $7.2 million. Suchreductions were expected to have a negative impact on counties who might face the decision toraise taxes or limit services. Paradoxically, counties are both legally required to provide indigentcare services and legally constrained regarding taxing amounts. Compounding the dilemma isthe growing number of uninsured in the state, particularly given the most recent cuts to Medicaidand SCHIP. 10 However, the county is not liable for payments for health care services providedto its eligible residents once the county reaches the 8 percent expenditure level if the state failsto provide assistance funds. 11According to state department of health figures, the state had a total of approximately $6.4million available for the SFY 2004, including a $1.3 million fund transfer in June 2004. The 20counties requesting state matching funds had a combined request total of over $5.5 million,apparently leaving a little over $0.8 million in unused funds. The combined expenditures of allcounties reporting for SFY 2004 was over $63.9 million. That amount, less the state reimbursedamount, leaves over $59.5 million in indigent care provided by counties. Twenty-one countieshad expenditures exceeding 8 percent of their GRTL for 2004. Another 18 counties spentbetween 6 and 8 percent of their GRTL. 12 Until recently, the bulk of the state assistance fundswent to two counties in south Texas, Hildalgo and Cameron. In the 2004-2005 appropriation billfor TDHS, Rider 53 imposed a cap on the distribution of assistance funds to one county. Thecap was set at 35 percent of the total funds appropriated. 13B-49