‘‘(II) 1.00, plus (in the case of 
fiscal year 2014 or any succeeding fis-
cal year) the percentage (if any) by 
which the average of the CPI (as de-
fined 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 2012, 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 para-
graph (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 enti-
ty 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). 
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‘‘(B) LIMITATION.—The total amount pay-
able to an entity under this subsection for a fis-
cal 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 sec-
tion 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 an 
entity with respect to a calendar quarter— 
‘‘(i) if the seasonally adjusted average 
unemployment rate with respect to entity 
for the quarter or any of the preceding 4 
calendar quarters exceeds 6.5 percent; or 
‘‘(ii) in the case that the unemploy-
ment rate information described in clause 
(i) is not available with respect to the enti-
ty, if the entity meets such qualifications 
as the Secretary, in consultation with the 
Secretary of Labor, shall, by regulation, 
prescribe. 
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‘‘(B) BASE YEAR.—The term ‘base year’ 
means, with respect to an entity, and a cal-
endar quarter in a fiscal year— 
‘‘(i) except as provided in clause (ii), 
whichever of the 2 fiscal years most re-
cently preceding the 1st fiscal year of the 
most recent contingency fund eligibility pe-
riod for the entity, is the fiscal year in 
which the relevant expenditures of the enti-
ty were the lesser; or 
‘‘(ii) if the 1st year of the period re-
ferred to in clause (i) is fiscal year 2012, 
whichever of fiscal year 2007 or 2008 is 
the fiscal year in which the relevant ex-
penditures of the entity were the lesser. 
‘‘(C) CONTINGENCY FUND ELIGIBILITY PE-
RIOD.—The term ‘contingency fund eligibility 
period’ means, with respect to an entity, a pe-
riod of 1 or more consecutive calendar quarters 
for which the entity is an economically needy 
entity. 
‘‘(D) RELEVANT EXPENDITURES.— 
‘‘(i) IN GENERAL.—The term ‘relevant 
expenditures’ means expenditures— 
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