; and (2) in subparagraph (B), by redesignating clauses (iii) through (v) as clauses (iv) through (vi), respectively, and inserting after clause (ii) the following: (iii) Inflation-adjusted historic State expenditures The term inflation-adjusted historic State expenditures means, with respect to a fiscal year— (I) historic State expenditures; multiplied by (II) 1.00, plus (in the case of fiscal year 2019 or any succeeding fiscal year) the percentage (if any) by which the average of the CPI (as defined in section 403(a)(1)(B)(iii)) for the 12-month period ending with June of the preceding fiscal year exceeds the average of the CPI (as so defined) for the 12-month period ending with June 2017, expressed as a decimal. . (c) Modification of contingency fund (1) In general Section 403(b) ( 42 U.S.C. 603(b) ) is amended by striking all that follows paragraph (1) and inserting the following: (2) Grants (A) In general The Secretary shall make a grant to each eligible State and each Indian tribe that is an economically needy entity for a calendar quarter, in an amount equal to 80 percent of the amount (if any) by which the total amount of relevant expenditures of the entity for the quarter exceeds the total amount of the relevant expenditures of the entity for the corresponding quarter in the base year of the entity, subject to paragraph (2). (B) Limitation The total amount payable to an entity under this subsection for a fiscal year shall not exceed an amount equal to 25 percent of the amount payable to the entity— (i) if the entity is a State, under section 403(a)(1) for the fiscal year; or (ii) if the entity is an Indian tribe, under section 412(a)(1) for the fiscal year. (3) Definitions In paragraph (2): (A) Economically needy entity The term economically needy entity means, with respect to a calendar quarter— (i) an entity with a seasonally adjusted average unemployment rate for the quarter or any of the preceding 4 calendar quarters that exceeds 6.5 percent