Act) $500,000,000 to reimburse States for the costs of 
the administration of agreements under this Act (includ-
ing any improvements in technology in connection there-
with) and to provide reemployment services to unemploy-
ment compensation claimants in States having agreements 
under this Act. Each State’s share of the amount appro-
priated by the preceding sentence shall be determined by 
the Secretary according to the factors described in section 
302(a) of the Social Security Act and certified by the Sec-
retary to the Secretary of the Treasury. 
SEC. 4. FINANCING PROVISIONS. 
(a) IN GENERAL.—Funds in the extended unemploy-
ment compensation account (as established by section 
905(a) of the Social Security Act), and the Federal unem-
ployment account (as established by section 904(g) of the 
Social Security Act), of the Unemployment Trust Fund 
shall be used, in accordance with subsection (b), for the 
making of payments (described in section 4(a)) to States 
having agreements entered into under this Act.
(b) CERTIFICATION.—The Secretary shall from time 
to time certify to the Secretary of the Treasury for pay-
ment to each State the sums described in section 4(a) 
which are payable to such State under this Act. The Sec-
retary of the Treasury, prior to audit or settlement by the 
General Accounting Office, shall make payments to the
State in accordance with such certification by transfers 
from the extended unemployment compensation account 
(or, to the extent that there are insufficient funds in that 
account, from the Federal unemployment account) to the 
account of such State in the Unemployment Trust Fund. 
SEC. 5. DEFINITIONS. 
For purposes of this Act: 
(1) IN GENERAL.—The terms ‘‘compensation’’, 
‘‘regular compensation’’, ‘‘base period’’, ‘‘State’’, 
‘‘State agency’’, ‘‘State law’’, and ‘‘week’’ have the 
respective meanings given such terms under section 
205 of the Federal-State Extended Unemployment 
Compensation Act of 1970, subject to paragraph 
(2). 
(2) STATE
LAW
AND
REGULAR
COMPENSA-
TION.—In the case of a State entering into an 
agreement under this Act—
(A) ‘‘State law’’ shall be considered to 
refer to the State law of such State, applied in 
conformance with the modifications described in 
section 2(b)(2), subject to section 2(c), and 
(B) ‘‘regular compensation’’ shall be con-
sidered to refer to such compensation, deter-
mined under its State law (applied in the man-
ner described in subparagraph (A)),
except as otherwise provided or where the context 
clearly indicates otherwise. 
SEC. 6. APPLICABILITY. 
(a) IN GENERAL.—An agreement entered into under 
this Act shall apply to weeks of unemployment—
(1) beginning after the date on which such 
agreement is entered into, and 
(2) ending before July 1, 2004. 
(b) SPECIFIC RULES.—Under such an agreement—
(1) the modification described in section 
2(b)(2)(A) (relating to alternative base periods) shall 
not apply except in the case of initial claims filed 
after September 11, 2001, and 
(2) the modifications described in section 
2(b)(2)(B)–(C) (relating to part-time employment 
and increased benefits, respectively) shall apply to 
weeks of unemployment (described in subsection 
(a)), irrespective of the date on which an individual’s 
claim for benefits is filed. 
SEC. 7. NO REDUCTION IN UNEMPLOYMENT COMPENSA-
TION AS A RESULT OF PENSION ROLLOVERS. 
(a) IN GENERAL.—Section 3304(a) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following flush sentence:
‘‘In no event shall paragraph (15) apply in the case of 
any rollover distribution which is not includable in gross 
income for the taxable year in which paid.’’. 
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section shall 
apply to compensation paid for weeks of unemploy-
ment beginning on or after the date that is 60 days 
after the date of enactment of the Economic Secu-
rity Act of 2003. 
(2) EXTENSION
OF
EFFECTIVE
DATE
FOR 
STATE
LAW
AMENDMENT.—If the Secretary of 
Labor determines that a State requires an amend-
ment to State law for that State to meet the require-
ments imposed under the Federal-State Extended 
Unemployment Compensation Act of 1970 (26 
U.S.C. 3304 note) by the amendment made by this 
section, the State shall not be regarded as failing to 
comply with the requirements of such Act solely on 
the basis of its failure to meet these requirements 
before the first day of the first calendar quarter be-
ginning after the close of the first regular session of 
the State legislature that begins after the date of the 
enactment of this Act. For purposes of the previous 
sentence, in the case of a State that has a 2-year
legislative session, each year of the session is consid-
ered to be a separate regular session of the State 
legislature.
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