DEFINITIONS.

SEC. 604. DEFINITIONS.(a) In General.—Section 480 (20 U.S.C. 1087vv) is amended—(1) in subsection (a)(2)—(A) by striking “and no portion” and inserting “no portion”; and(B) by inserting “and no distribution from any qualified education benefit described in subsection (f)(3) that is not subject to Federal income tax,” after “1986,”;(2) by striking subsection (b) and inserting the following:“(b) Untaxed Income and Benefits.—“(1) The term ‘untaxed income and benefits’ means—“(A) child support received;“(B) workman’s compensation;“(C) veteran’s benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ education benefits as defined in subsection (c);“(D) interest on tax-free bonds;“(E) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits);“(F) cash support or any money paid on the student‘s behalf, except, for dependent students, funds provided by the student’s parents;“(G) untaxed portion of pensions;“(H) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and“(I) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, or railroad retirement benefits, or benefits received through participation in employment and training activities under title I of the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.).“(2) The term ‘untaxed income and benefits’ shall not include the amount of additional child tax credit claimed for Federal income tax purposes.”;(3) in subsection (d)—(A) by redesignating paragraphs (1), (2), (3) through (6), and (7) as subparagraphs (A), (B), (D) through (G), and (I), respectively, and indenting appropriately;(B) by striking “The term” and inserting the following:“(1) Definition.—The term”;(C) by striking subparagraph (B) (as redesignated by subparagraph (A)) and inserting the following:“(B) is an orphan, in foster care, or a ward of the court, at any time when the individual is 13 years of age or older;“(C) is an emancipated minor or is in legal guardianship as determined by a court of competent jurisdiction in the individual’s State of legal residence;”;121 STAT. 807(D) in subparagraph (G) (as redesignated by subparagraph (A)), by striking “or” after the semicolon;(E) by inserting after subparagraph (G) (as redesignated by subparagraph (A)) the following:“(H) has been verified during the school year in which the application is submitted as either an unaccompanied youth who is a homeless child or youth (as such terms are defined in section 725 of the McKinney-Vento Homeless Assistance Act), or as unaccompanied, at risk of homelessness, and self-supporting, by—“(i) a local educational agency homeless liaison, designated pursuant to section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act;“(ii) the director of a program funded under the Runaway and Homeless Youth Act or a designee of the director;“(iii) the director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act (relating to emergency shelter grants) or a designee of the director; or“(iv) a financial aid administrator; or”; and(F) by adding at the end the following:“(2) Simplifying the dependency override process.—A financial aid administrator may make a determination of independence under paragraph (1)(I) based upon a documented determination of independence that was previously made by another financial aid administrator under such paragraph in the same award year.”;(4) in subsection (e)—(A) in paragraph (3), by striking “and” after the semicolon;(B) in paragraph (4), by striking the period at the end and inserting “; and”; and(C) by adding at the end the following:“(5) special combat pay.”;(5) in subsection (f), by striking paragraph (3) and inserting the following:“(3) A qualified education benefit shall be considered an asset of—“(A) the student if the student is an independent student; or“(B) the parent if the student is a dependent student, regardless of whether the owner of the account is the student or the parent.”;(6) in subsection (j)—(A) in paragraph (2), by inserting “, or a distribution that is not includable in gross income under section 529 of such Code, under another prepaid tuition plan offered by a State, or under a Coverdell education savings account under section 530 of such Code,” after “1986”; and(B) by adding at the end the following:“(4) Notwithstanding paragraph (1), special combat pay shall not be treated as estimated financial assistance for purposes of section 471(3).”; and(7) by adding at the end the following:121 STAT. 808 “(n) Special Combat Pay.—The term ‘special combat pay’ means pay received by a member of the Armed Forces because of exposure to a hazardous situation.”.(b) Effective Date.—The amendments made by this section shall be effective on July 1, 2009.