To amend title XXI of the Social Security Act to provide for a special rule during the first quarter of fiscal year 2018 for the redistribution of certain Children's Health Insurance Program allocations for certain shortfall States.

Summary: This bill&nbsp;amends title XXI (Children's Health Insurance Program [CHIP]) of the Social Security Act to establish a special rule,&nbsp;with respect to&nbsp;the first quarter of FY2018,&nbsp;for the redistribution of unused CHIP allotments to state child health plans&nbsp;experiencing emergency shortfalls. Specifically, the Centers for Medicare &amp; Medicaid Services&nbsp;(CMS) must&nbsp;redistribute&nbsp;unused allotments to each&nbsp;such state in an amount equal to the state's emergency shortfall before the CMS may redistribute the allotments to any state that is experiencing a nonemergency shortfall. 

SECTION 1. CHIP ALLOCATION REDISTRIBUTION SPECIAL RULE FOR CERTAIN 
              SHORTFALL STATES DURING FIRST QUARTER OF FISCAL YEAR 
              2018.

    Section 2104(f)(2) of the Social Security Act (42 U.S.C. 
1397dd(f)(2)) is amended--
            (1) by amending subparagraph (B) to read as follows:
                    ``(B) Determination of redistributed amounts if 
                insufficient amounts available.--
                            ``(i) Proration rule.--Subject to clause 
                        (ii), if the amounts available for 
                        redistribution under paragraph (1) for a fiscal 
                        year are less than the total amounts of the 
                        estimated shortfalls determined for the year 
                        under subparagraph (A), the amount to be 
                        redistributed under such paragraph for each 
                        shortfall State shall be reduced 
                        proportionally.
                            ``(ii) Special rule for first quarter of 
                        fiscal year 2018.--
                                    ``(I) In general.--For the period 
                                beginning on October 1, 2017, and 
                                ending December 31, 2017, with respect 
                                to any amounts available for 
                                redistribution under paragraph (1) for 
                                fiscal year 2018, the Secretary shall 
                                redistribute under such paragraph such 
                                amounts to each emergency shortfall 
                                State (as defined in subclause (II)) in 
                                such amount as is equal to the amount 
                                of the shortfall described in subclause 
                                (II) for such State and period (as may 
                                be adjusted under subparagraph (C)) 
                                before the Secretary may redistribute 
                                such amounts to any shortfall State 
                                that is not an emergency shortfall 
                                State. In the case of any amounts 
                                redistributed under this subclause to a 
                                State that is not an emergency 
                                shortfall State, such amounts shall be 
                                determined in accordance with clause 
                                (i).
                                    ``(II) Emergency shortfall state 
                                defined.--For purposes of this clause, 
                                the term `emergency shortfall State' 
                                means, with respect to the period 
                                beginning October 1, 2017, and ending 
                                December 31, 2017, a shortfall State 
                                for which the Secretary estimates, in 
                                accordance with subparagraph (A) 
                                (unless otherwise specified in this 
                                subclause), that the projected 
                                expenditures under the State child 
                                health plan and under section 2105(g) 
                                (calculated as if the reference under 
                                section 2105(g)(4)(A) to `2017' were a 
                                reference to `2018' and insofar as the 
                                allotments are available to the State 
                                under this subsection or subsection (e) 
                                or (m)) for such period will exceed the 
                                sum of the amounts described in clauses 
                                (i) through (iii) of subparagraph (A) 
                                for such period, including after 
                                application of any amount redistributed 
                                under paragraph (1) before such date of 
                                enactment to such State. A shortfall 
                                State may be an emergency shortfall 
                                State under the previous sentence 
                                without regard to whether any amounts 
                                were redistributed before such date of 
                                enactment to such State under paragraph 
                                (1) for fiscal year 2018.
                                    ``(III) Application of qualifying 
                                state option.--During the period 
                                described in subclause (I), section 
                                2105(g)(4) shall apply to a qualifying 
                                State (as defined in section 
                                2105(g)(2)) as if under section 
                                2105(g)(4)--
                                            ``(aa) the reference to 
                                        `2017' were a reference to 
                                        `2018'; and
                                            ``(bb) the reference to 
                                        `under subsections (e) and (m) 
                                        of such section' were a 
                                        reference to `under subsections 
                                        (e), (f), and (m) of such 
                                        section'.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Rule of construction.--Nothing in this 
                paragraph may be construed as preventing a commonwealth 
                or territory described in subsection (c)(3) from being 
                treated as a shortfall State or an emergency shortfall 
                State.''.