[Federal Register Volume 59, Number 22 (Wednesday, February 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2256]


[[Page Unknown]]

[Federal Register: February 2, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 233

RIN 0970-AA70

 

Aid to Families With Dependent Children and Adult Assistance 
Programs Income and Resources Disregards

AGENCY: Administration for Children and Families (ACF), HHS.

ACTION: Final rule.

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SUMMARY: These final rules update the statutory disregards in 
regulations for the Aid to Families with Dependent Children (AFDC) 
program, and the adult assistance programs in Guam, Puerto Rico and the 
Virgin Islands by adding the income and resources disregards provided 
under several public laws. The disregards are: (1) Section 479B of the 
Higher Education Act of 1965, as amended by Public Law 102-325, the 
Higher Education Amendments of 1992, which provides that student 
financial assistance received under the programs in title IV of the 
Higher Education Act, or under Bureau of Indian Affairs student 
assistance programs, will not be taken into account in determining need 
or amount of benefits; (2) section 501(c) of Public Law 101-392, the 
Carl D. Perkins Vocational and Applied Technology Education Act 
Amendments of 1990, which provides that student financial assistance 
made for attendance costs will not be counted as income or resources; 
(3) section 105 of Public Law 100-383, the Civil Liberties Act of 1988, 
which provides that restitution made to individuals of Japanese 
ancestry who were interned during World War II will not be counted as 
income or resources, and section 206 of Public Law 100-383, the 
Aleutian and Pribilof Islands Restitution Act, which provides that 
restitution made to Aleuts who were relocated by the United States 
government during World War II will not be counted as income or 
resources; (4) section 105 of Public Law 100-707, the Disaster Relief 
and Emergency Assistance Amendments of 1988, which provides that major 
disaster and emergency assistance will not be counted as income or 
resources; (5) section 1(a) of Public Law 101-201 and section 10405 of 
Public Law 101-239, the Omnibus Budget Reconciliation Act of 1989, 
which both provide that Agent Orange payments will not be counted as 
income or resources; and (6) section 6(h)(2) of Public Law 101-426, the 
Radiation Exposure Compensation Act, which provides that amounts paid 
pursuant to this Act will not be counted as income and resources.
    These final rules also amend the existing regulations to provide 
that bona fide loans will not be counted as income or resources.

effective date: February 2, 1994.

for further information contact: Mr. Mack A. Storrs, Administration for 
Children and Families, Office of Family Assistance, Fifth Floor, 370 
L'Enfant Promenade, SW., Washington, DC 20447, telephone (202) 401-
9289.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

    On July 15, 1991, we published a Notice of Proposed Rulemaking 
(NPRM) in the Federal Register relating to updating the statutory 
disregards in regulations for the AFDC program, and adult assistance 
programs in Guam, Puerto Rico and the Virgin Islands.

Discussion of Regulatory Provisions and Responses to Comments

    The final rules implement the disregard provisions of several 
public laws and revise existing regulations to require the disregard of 
bona fide loans as discussed below:

Disregard of Student Financial Assistance Provided Under the Higher 
Education Amendments of 1992 and the Carl D. Perkins Vocational and 
Applied Technology Education Act

Higher Education Amendments of 1992
    Public Law 102-325, the Higher Education Amendments of 1992, 
enacted July 23, 1992, amends the Higher Education Act of 1965. 
Effective July 1, 1993, section 471(a) of Public Law 102-325 revises 
section 479B to provide that any student financial assistance received 
under programs in title IV of the Higher Education Act, or under Bureau 
of Indian Affairs student assistance programs, shall be disregarded in 
determining the need or eligibility of any person for benefits or 
assistance, or the amount of such benefits or assistance, under any 
Federal, State, or local programs financed in whole or in part with 
Federal funds.
    Some examples of student financial assistance authorized by title 
IV of the Higher Education Act are: the Pell Grant Program, the 
Supplemental Educational Opportunity Grant (SEOG) Program, the National 
Direct Student Loan (NDSL) Program, the PLUS Program, the Byrd Honor 
Scholarship Programs and the College Work Study Program.
    We are adding a new Sec. 233.20(a)(4)(ii)(p) to implement Public 
Law 102-325.
    Since the regulatory changes related to section 479B of the Higher 
Education Act do not involve administrative discretion, but simply 
implement statutory requirements, we believe that, under 5 U.S.C. 
553(b)(3)(B), good cause exists for waiver of a notice of proposed 
rulemaking on the grounds that it is not necessary.
    In the NPRM, we proposed to include in regulations the disregard 
authorized by the former section 479B, as added by section 14(27) of 
Public Law 100-50. The former section 479B limited the disregard to 
student financial assistance made available for the attendance costs 
defined in that section. Child care and living expenses were not 
defined as attendance costs. Therefore, we proposed that assistance for 
such costs would not be disregarded under this regulation unless the 
educational institution provided for them as part of miscellaneous 
personal expenses.
    We received comments from three State agencies, one County agency, 
and one legal advocacy group on the proposed rule. The comments are 
discussed below:
    Comment: The commenters recommended that we disregard all of the 
educational assistance, including amounts provided for child care and 
living expenses, because counting any part of the educational 
assistance may inflate State error rates and may be a severe 
disincentive to the continuation of post-secondary education.
    Response: Effective July 1, 1993, a new statutory amendment 
eliminated the limitations on the disregard. Therefore, we have changed 
the regulation to implement the new statutory requirement that all 
student financial assistance received under programs in title IV of the 
Higher Education Act or under Bureau of Indian Affairs educational 
assistance programs will be disregarded as income and resources.
Carl D. Perkins Vocational and Applied Technology Education Act 
Amendments of 1990
    Public Law 101-392, the Carl D. Perkins Vocational and Applied 
Technology Education Act Amendments of 1990, enacted September 25, 
1990, substantially amended the Carl D. Perkins Vocational and Applied 
Technology Education Act (20 U.S.C. 2301 et seq.) by authorizing grants 
to States and Indian Tribes to carry out various vocational education 
assistance programs. Section 221(a)(1) authorizes the use of certain 
funds to provide, subsidize, reimburse, or pay for preparatory 
services, including instruction in basic academic and occupational 
skills, necessary educational materials, and career guidance and 
counseling services, in preparation for vocational education and 
training that will furnish single parents, displaced homemakers, and 
single pregnant women with marketable skills.
    Section 507(a) of the Carl D. Perkins Vocational and Applied 
Technology Education Act specifies that the portion of any student 
financial assistance received under this Act that is made available for 
attendance costs defined in section 507(b) of the Act shall not be 
considered as income or resources in determining eligibility for 
assistance under any other program funded in whole or in part with 
Federal funds.
    Under section 507(b), attendance costs are defined as:
    (1) Tuition and fees normally assessed a student carrying the same 
academic workload as determined by the institution, and including costs 
for rental or purchase or any equipment, materials, or supplies 
required of all students in the same course of study; and
    (2) An allowance for books, supplies, transportation, dependent 
care and miscellaneous personal expenses for a student attending the 
institution on at least a half-time basis, as determined by the 
institution.
    Living expenses are not designated as attendance costs under 
section 507(b). Therefore, such expenses will be disregarded only when 
they are provided as part of miscellaneous personal expenses.
    Further, section 507 of Public Law 90-575, the Higher Education 
Amendments of 1968, and implementing regulations at 
Sec. 233.20(a)(4)(ii)(d) require that any grant or loan to an 
undergraduate student for educational purposes made or insured under 
any program administered by the Department of Education will be 
disregarded as income and resources in programs under titles I, IV, X, 
XIV, XVI(AABD), or XIX of the Social Security Act.
    The combined effect of section 507 of the Carl D. Perkins 
Vocational and Applied Technology Education Act and section 507 of the 
Higher Education Amendments of 1968 is as follows:
    (1) Educational loans and grants provided to undergraduate students 
under any programs administered by the Department of Education, except 
those in the Carl D. Perkins Vocational and Applied Technology 
Education Act, will not be counted as income or resources for purposes 
of the AFDC and adult assistance programs; and
    (2) Educational assistance provided for attendance costs under 
programs in the Carl D. Perkins Vocational and Applied Technology 
Education Act will not be counted as income or resources for purposes 
of the AFDC and adult assistance programs.
    We are revising the regulations at Sec. 233.20(a)(4)(ii)(d) and 
adding a new Sec. 233.20(a)(4)(ii)(t) to implement section 501(c) of 
Public Law 101-392. In this connection, it should be noted that these 
regulations do not preclude the disregard of educational assistance 
under any other applicable disregard, e.g., the disregard of bona fide 
loans or complementary assistance.
    Since the regulatory changes related to section 501(c) of the Carl 
D. Perkins Vocational and Applied Technology Education Act do not 
involve administrative discretion, but simply implement statutory 
requirements, we believe that, under 5 U.S.C. 553(b)(3)(B), good cause 
exists for waiver of a notice of proposed rulemaking on the grounds 
that it is no necessary.

Disregard of Payments Provided Under the Civil Liberties Act of 1988 
and the Aleutian and Pribilof Islands Restitution Act

Civil Liberties Act of 1988
    Title I of Public Law 100-383, the Civil Liberties Act of 1988, 
provides that restitution shall be made to the United States citizens 
and permanent resident aliens of Japanese ancestry who were interned 
during World War II.
    Section 105 of Public Law 100-383 provides that the Attorney 
General shall pay to each eligible individual the sum of $20,000. If 
the eligible individual is deceased, the payment will be made to the 
eligible individual's spouse, children or parents. Section 105(f)(2) 
provides that the amount of such payments shall not be counted as 
income or resources for purposes of determining eligibility to receive 
benefits described in section 3803(c)(2)(C) of title 31, United States 
Code, or the amount of such benefits.
Aleutian and Pribilof Islands Restitution Act
    Title II of Public Law 100-383, the Aleutian and Pribilof Islands 
Restitution Act, provides that restitution shall be made to any Aleut 
living on the date of the enactment of Public Law 100-383 (August 10, 
1988) who, as a civilian, was relocated by authority of the United 
States from his or her home village on the Pribilof Islands or the 
Aleutian Islands west of Unimak Island to an internment camp, or other 
temporary facility or location during World War II, or who was born 
while his or her natural mother was subject to such relocation.
    Section 206 of Public Law 100-383 provides that the Secretary of 
the Interior shall pay to each eligible Aleut the sum of $12,000. 
Section 206(d)(2) of Public Law 100-383 provides that the amount of 
such payments shall not be counted as income or resources for purposes 
of determining eligibility to receive benefits described in section 
3803(c)(2)(C) of title 31, United States Code, or the amount of such 
benefits.
    Section 3803(c)(2)(C) of title 31, United States Code, contains a 
list of various Federal and federally-assisted programs, including, 
among others, the AFDC program. However, the list does not include the 
adult assistance programs under titles I, X, XIV, and XVI (AABD) of the 
Social Security Act. Therefore, the disregards required by sections 
105(f)(2) and 206(d)(2) of Public Law 100-383 do not apply to the adult 
assistance programs administered in Guam, Puerto Rico and the Virgin 
Islands.
    There were no comments on these provisions. Thus, a new 
Sec. 233.20(a)(4)(ii)(g) implements the provisions as proposed.

Disregard of Major Disaster and Emergency Assistance

    Title I of Public Law 100-707, the Disaster Relief and Emergency 
Assistance Amendments of 1988, enacted November 23, 1988, amended the 
Disaster Relief Act of 1974 (42 U.S.C. Secs. 5121-5202) to provide for 
more effective assistance in response to major disasters and 
emergencies.
    Section 105 of Public Law 100-707 provides that Federal major 
disaster and emergency assistance provided to individuals and families 
under this Act, and comparable disaster assistance provided by States, 
local governments, and disaster assistance organizations, shall not be 
considered as income or resources when determining eligibility for or 
benefit levels under federally funded income assistance or resource-
tested benefit programs.
    Section 103 of Public Law 100-707 defines an emergency to mean any 
occasion or instance for which, in the determination of the President, 
Federal assistance is needed to supplement State and local efforts and 
capabilities to save lives and to protect property and public health 
and safety, or to lessen or avert the threat of a catastrophe in any 
part of the United States.
    Section 103 defines a major disaster to mean any natural 
catastrophe (including any hurricane, tornado, storm, high water, 
winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought), or regardless of cause, 
any fire, flood, or explosion, in any part of the United States, which 
in the determination of the President causes damage of sufficient 
severity and magnitude to warrant major disaster assistance under the 
Disaster Relief Act to supplement the efforts and available resources 
of States, local governments, and disaster relief organizations in 
alleviating the damage, loss, hardship or suffering caused thereby.
    There were no comments on the proposed rule. Thus, a new 
Sec. 233.20(a)(4)(ii)(r) implements the provision as proposed.

Disregard of Agent Orange Payments

    In the In Re Agent Orange product liability case, M.D.L. No. 381 
(E.D.N.Y.), several corporations which manufactured the chemical Agent 
Orange agreed to pay $180 million into a settlement fund. Under the 
settlement, military personnel who were exposed to the chemical Agent 
Orange while in Vietnam and who now suffer from total disabilities 
caused by any disease, and survivors of deceased veterans who were 
exposed to Agent Orange, are eligible for settlement payments.
    Section 1 of Public Law 101-201, enacted December 6, 1989, 
specifies that, effective January 1, 1989, the payments made from the 
Agent Orange Settlement Fund or any other fund pursuant to the 
settlement in connection with the case In Re Agent Orange product 
liability litigation, M.D.L. No. 381 (E.D.N.Y.), shall not be 
considered income or resources in determining eligibility for or the 
amount of benefits under any Federal or federally assisted programs.
    Section 10405 of Public Law 101-239, enacted December 19, 1989, 
also specifies that, effective January 1, 1989, payments from the Agent 
Orange settlement fund or any other fund established pursuant to the 
settlement shall not be considered income or resources in determining 
eligibility for or the amount of benefits under certain specified 
Federal or federally assisted programs including, among others, AFDC 
(title IV-A of the Social Security Act) and the adult assistance 
programs (titles I, X, XIV, and XVI (AABD) of the Act).
    There were no comments on the proposed rule. Thus, a new 
Sec. 233.20(a)(4)(ii)(s) implements these provisions as proposed.

Disregard of Payments Made Under the Radiation Exposure Compensation 
Act

    Public Law 101-426, the Radiation Exposure Compensation Act, 
enacted October 15, 1990, establishes a program to compensate 
individuals for injuries or deaths resulting from the exposure to 
radiation from nuclear testing and uranium mining.
    The law authorizes a $100 million trust fund from which payments 
will be made. Payments may be made until the earlier of the date on 
which the $100 million, and any income earned on this amount, is 
expended or 22 years after the law was enacted.
    Individuals who were injured due to exposure to radiation from 
nuclear testing will receive $50,000 each. Individuals who were injured 
due to exposure to radiation while employed as uranium miners will 
receive $100,000 each. When the affected individual is deceased, 
payments will be made to the surviving spouse, children, parents, 
grandchildren or grandparents.
    Section 6(h)(2) of the Radiation Exposure Compensation Act provides 
that amounts paid to an individual pursuant to this law will not be 
included as income or resources for purposes of determining eligibility 
to receive benefits described in section 3803(c)(2)(C) of title 31, 
United States Code, or the amount of such benefits.
    Section 3803(c)(2)(C) of title 31, United States Code contains a 
list of various Federal and federally-assisted programs including, 
among others, the AFDC program. However, the list does not include the 
adult assistance programs under titles I, X, XIV, and XVI (AABD) of the 
Social Security Act. Therefore, the disregards required by section 
6(h)(2) of Public Law 101-426 do not apply to the adult assistance 
programs administered in Guam, Puerto Rico, and the Virgin Islands. 
Action Transmittal FSA-AT-91-5, dated February 25, 1991, notified the 
States of the requirements of Public Law 101-426 to disregard, for 
purposes of the AFDC program, compensation received by individuals, or 
upon death by the spouse, children, parents, grandchildren, or 
grandparents, for injuries sustained by such individuals due to the 
exposure to radiation from nuclear testing or uranium mining.
    We are adding a new Sec. 233.20(a)(4)(ii)(u) to implement this 
provision.
    Since the regulatory changes related to section 6(h)(2) of the 
Radiation Exposure Compensation Act, Public Law 101-426, do not involve 
administrative discretion, but simply implement the statutory 
requirements, we believe that, under 5 U.S.C. 553(b)(3)(B) good cause 
exists for waiver of a notice of proposed rulemaking on the grounds 
that it is not necessary.

Disregard of Bona Fide Loans

    Section 223.20(a)(3)(iv)(B) of the existing regulations states 
that, in determining the availability of income and resources, loans 
which are obtained and used under conditions that preclude their use to 
meet current living costs will not be counted as income. Under this 
regulation, loans that are available to meet current living expenses 
are considered countable income.
    However, because of an adverse court decision in the case of 
Mangrum v. Griepentrog v. Bowen, 702 F. Supp. 813 (D. Nev. 1988), the 
Department of Health and Human Services issued Information Memorandum 
FSA-IM-89-1, dated January 3, 1989. The Information Memorandum permits 
States the option to disregard bona fide loans as income and resources. 
Between January and June 1989, 45 States implemented the option.
    These final regulations amend the policy on treatment of loans to 
require that States disregard bona fide loans from any source and for 
any purpose as income and resources in the determination of eligibility 
and the amount of benefits under the AFDC and adult assistance 
programs.
    The amendment is based on the principles discussed in the Mangrum 
court decision. The court stated, with respect to counting loans as 
income, that the essential characteristic of a loan is that it must be 
repaid. This duty to repay distinguishes loans from wages, personal 
injury awards, gifts, child support payments and all other forms of 
income. Since the borrower must repay the loan principal in its 
entirety (and possibly with interest), the loan principal may not be 
income for AFDC purposes.
    Although the issue in Mangrum was counting loans as income, the 
court also addressed treatment of loans as resources. The court cited 
the decision in National Welfare Rights Organization v. Mathews, 533 F. 
2d. 637 (DC Cir. 1976), and interpreted that decision to mean that the 
actual value of an item, whether it is a financial instrument or 
personal property, is its fair market value, less its encumbrances, 
that is, its equity value. The court stated that since loans must be 
repaid, they are totally encumbered and have no equity value. 
Accordingly, it is also not appropriate to treat the loan principal as 
a resource under the AFDC program.
    The proposed rule stated that funds would be considered a bona fide 
loan when an applicant or recipient submits to the State agency one of 
several types of documents to verify that funds were provided with the 
expectation of repayment so that a legal debt exists.
    We received comments on this provision from six State agencies and 
two legal advocacy groups. The comments are discussed below:
    Comment: All the commenters expressed support for the disregard of 
bona fide loans as income and resources. However, most of the 
commenters recommended that we expand the definition of a bona fide 
loan to include oral contracts because oral contracts are recognized as 
valid under Federal and State law. The commenters also recommended that 
we remove specific language requiring a written document and allow 
States to use a process which will exempt loans if there is an 
understanding that the money will be repaid and the borrower can 
reasonably explain how the loan will be repaid.
    Response: In view of the comments, we have decided to allow each 
State to determine what constitutes a bona fide loan. This approach 
will provide the recommended flexibility for States to establish 
objective and reasonable criteria for determining that a bona fide loan 
exists. Therefore, the final regulation will require that each State 
include in its State plan criteria for identifying a bona fide loan.
    Comment: Two commenters stated that the income of a self-employed 
person consists of the total profit--defined as the comparison of gross 
receipts with business expenses. The commenters recommended that we 
amend the regulations at 45 CFR 233.20(a)(6)(v)(B) to define payments 
on business loans as business expenses for the purposes of determining 
the profit from a business. They also suggested that we amend the 
regulations to disregard any profits derived from loans on a business 
enterprise which are kept in a separate account that is used for the 
business.
    Response: This comment is outside the scope of this rulemaking. 
Therefore, we are not addressing it as part of this final regulation.
    Comment: Two commenters requested that we amend the regulations to 
clarify that only the principal of a loan can be disregarded, and the 
disregard does not extend to interest earned on a loan or purchases 
made with the proceeds of a loan.
    Response: We agree. To clarify that only the principal of a loan 
can be disregarded, the final regulation provides that the disregard 
does not extend to interest earned on a loan while held by the 
borrower, or purchases made with the proceeds of a loan. Consistent 
with the general AFDC policy for the treatment of interest earned on 
bank accounts, the final rule also provides that interest earned on the 
proceeds of a loan while held in a savings account, checking account or 
other financial instrument will be counted as unearned income in the 
month received and as a resource thereafter.
    Accordingly, we have revised the regulation at 
Sec. 233.20(a)(3)(iv)(B) and added a new Sec. 233.20(a)(3)(xxi) to 
implement this policy.

Regulatory Procedures

Executive Order 12291

    These regulations have been reviewed under Executive Order 12291 
and do not meet any of the criteria for a major regulation. Therefore, 
a regulatory impact analysis is not required because these regulations 
will not: (1) Have an annual effect on the economy of $100 million or 
more; (2) impose a major increase in costs or prices for consumers, 
individual industries, Federal, State or local government agencies or 
geographic regions; or (3) result in significant adverse effects on 
competition, employment, investment, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic or export markets.

Paperwork Reduction Act

    This rule does not require any information collection activities 
and, therefore, no approvals are necessary under the Paperwork 
Reduction Act.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (Pub. L. 96-354) requires the 
Federal government to anticipate and reduce the impact of regulations 
and paperwork requirements on small businesses. The primary impact of 
these final rules is on State governments and individuals. Therefore, 
we certify that these regulations will not have a significant impact on 
a substantial number of small entities because they primarily affect 
individuals and States. Thus, a regulatory flexibility analysis is not 
required.

(Catalog of Federal Domestic Assistance Programs 93.560, Assistance 
Payments-Maintenance Assistance)

List of Subjects in 45 CFR Part 233

    Aliens, Grant programs--social programs, Public assistance 
programs, Reporting and recordkeeping requirements.

    Dated: November 6, 1993.
Mary Jo Bane,
Assistant Secretary for Children and Families.
    Approved: January 24, 1994.
Donna E. Shalala,
Secretary of Health and Human Services.

    For the reasons set forth in the preamble, part 233 of chapter I, 
title 45, Code of Federal Regulations is amended as set forth below:

PART 233--COVERAGE AND CONDITIONS OF ELIGIBILITY IN FINANCIAL 
ASSISTANCE PROGRAMS

    1. The authority citation for part 233 is revised to read as 
follows:

    Authority: 42 U.S.C. 301, 602, 602 (note), 606, 607, 1202, 1302, 
1352, and 1382 (note); and sec. 6 of Pub. L. 94-114, 89 Stat. 579; 
Pub. L. 99-603, 100 Stat. 3359; sec. 4 of Pub. L. 97-458, 96 Stat. 
2513; sec. 2 of Pub. L. 98-64, 97 Stat. 365; sec. 1883 of Pub. L. 
99-514, 100 Stat. 2916; sec. 15 of Pub. L. 100-241, 101 Stat. 1812; 
sec. 105(f) of Pub. L. 100-383, 102 Stat. 908; sec. 206(d) of Pub. 
L. 100-383, 102 Stat. 914; sec. 105(i) of Pub. L. 100-707, 102 Stat. 
4693; sec. 1(a) of Pub. L. 101-201, 103 Stat. 1795; sec. 10405 of 
Pub. L. 101-239, 103 Stat. 2489; sec. 501(c) of Pub. L. 101-392, 104 
Stat. 831; sec. 6(h)(2) of Pub. L. 101-426, 104 Stat. 925; and sec. 
471(a) of Pub. L. 102-325, 106 Stat. 606.

    2. Section 233.20 is amended by revising paragraph (a)(3)(iv)(B), 
adding paragraph (a)(3)(xxi), revising paragraph (a)(4)(ii)(d) and 
adding paragraphs (a)(4)(ii)(p), (a)(4)(ii)(q), (a)(4)(ii)(r), 
(a)(4)(ii)(s), (a)(4)(ii)(t), and (a)(4)(ii)(u) to read as follows:


Sec. 233.20  Need and amount of assistance.

    (a) Requirements for State Plans. * * *
    (3) Income and Resources * * *
    (iv) * * *
    (B) Grants, such as scholarships, obtained and used under 
conditions that preclude their use for current living costs; * * *
    (xxi) Provide that the principal of a bona fide loan will not be 
counted as income or resources in the determination of eligibility and 
the amount of assistance. Interest earned on a loan is counted as 
unearned income in the month received and as resources thereafter and 
purchases made with a loan are counted as resources. For purposes of 
this paragraph, a loan is considered bona fide when it meets objective 
and reasonable criteria included in the State plan.
* * * * *
    (4) Disregard of income in OAA, AFDC, AB, APTD, or AABD.* * *
    (ii) * * *
    (d) Grants or loans to any undergraduate student for educational 
purposes made or insured under any programs administered by the 
Secretary of Education except the programs under the Carl D. Perkins 
Vocational and Applied Technology Education Act (20 U.S.C. 2301 et 
seq.). Student financial assistance provided under the Carl D. Perkins 
Vocational and Applied Technology Education Act will be disregarded in 
accordance with paragraph (a)(4)(ii)(t) of this section.
* * * * *
    (p) any student financial assistance provided under programs in 
title IV of the Higher Education Act of 1965, as amended, and under 
Bureau of Indian Affairs education assistance programs.
    (q) For AFDC, any payments made as restitution to an individual 
under title I of Public Law 100-383 (the Civil Liberties Act of 1988) 
or under title II of Public Law 100-383 (the Aleutian and Pribilof 
Islands Restitution Act).
    (r) Any Federal major disaster and emergency assistance provided 
under the Disaster Relief Act of 1974, as amended by Public Law 100-707 
(the Disaster Relief and Emergency Assistance Amendments of 1988) and 
comparable disaster assistance provided by States, local governments 
and disaster assistance organizations.
    (s) Any payments made pursuant to the settlement in the In Re Agent 
Orange Product liability litigation, M.D.L. No. 381 (E.D.N.Y.).
    (t) Student financial assistance made available for the attendance 
costs defined in this paragraph under programs in the Carl D. Perkins 
Vocational and Applied Technology Education Act (20 U.S.C. 2301 et 
seq.). Attendance costs are: tuition and fees normally assessed a 
student carrying the same academic workload as determined by the 
institution, and including costs for rental or purchase of any 
equipment, materials, or supplies required of all students in the same 
course of study; and an allowance for books, supplies, transportation, 
dependent care and miscellaneous personal expenses for a student 
attending the institution on at least a half-time basis, as determined 
by the institution.
    (u) For AFDC, any payments made pursuant to section 6(h)(2) of 
Public Law 101-426, the Radiation Exposure Compensation Act.
* * * * *
[FR Doc. 94-2256 Filed 2-1-94; 8:45 am]
BILLING CODE 4150-04-M