An Act to amend the Small Business Act and the Small Business Investment Act of 1958 to increase loan authorization and surety bond guarantee authority; and to improve the disaster assistance, certificate of competency and small business set-aside programs, and for other purposes.
PL 95-89 (H.R.692), enacted 08/04/1977

PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 553 
Public Law 95-89 
95th Congress 
An Act 
To amend the Small Business Act and the Small Business Investment Act of 
1958 to increase loan authorization and surety bond guarantee authority; and 
to improve the disaster assistance, certificate of competency and Small Busi-
ness set-aside programs, and for other purposes. 
Be it etiacted by the Senate and House of RepieHentati'ves 
of the 
United States of America in Congress assembled,, 
T I T L E I—AUTHORIZATIONS AND L I M I T A T I O N S 
SEC. 10L (a) Section 4(c) (1) of the Small Business Act is amended 
by striking out"', including administrative expenses in connection with 
such functions" following "7(g) of this Act" and by striking out ", 
including administrative expenses in connection with such functions" 
following '•'Small Business Investment Act of 1958". 
(b) Section 4(c)(3) of such Act is amended by striking the last 
sentence. 
(c) Section 4(c) (4) of such Act is repealed. 
(d) Section 7(a) (8) of such Act is repealed. 
(e) Section 7(g) (4) of such Act is repealed. 
SEC. 102. Section 20 of the Small Business Act is amended to read 
as follows: 
"SEC. 20. (a) There are hereby authorized to be appropriated such 
sums as may be necessary and appropriate to carry out the provisions 
and purposes of this Act other than those for which appropriations are 
specifically authorized. 
"(b) The following program levels are authorized for fiscal year 
1978: 
"(1) For the programs authorized by section 7(a) of this Act, the 
Administration is authorized to make $400,000,000 in direct loans, 
$15,000,000 in immediate participation loans, and $3,000,000,000 in 
deferred participation loans. 
"(2) For the programs authorized by section 7(h) of this Act, the 
Administration is authorized to make $30,000,000 in dii-ect and imme-
diate participation loans and $20,000,000 in guaranteed loans. 
"(3) For the programs authorized by section 7(i) of this Act, the 
Administration is authorized to make $60,000,000 in direct and immedi-
ate participation loans and $81,000,000 in guaranteed loans. 
"(4) For the programs authorized by sections 501 and 502 of the 
Small Business Investment Act of 1958, the Administration is author-
ized to make $45,000,000 in direct and immediate participation loans 
and $41,000,000 in guaranteed loans. 
"(5) For the programs authorized by title H I of the Small Business 
Investment Act of 1958, the Administration is authorized to make 
$20,000,000 in direct purchase of debentures and preferred securities 
and to make $180,000,000 in guarantees of debentures. 
" (6) For the programs authorized by part B of title IV of the Small 
Business Investment Act of 1958, the Administration is authorized to 
entei- into guarantees not to exceed $2,000,000,000. 
Aug. 4, 1977 
[H.R. 692] 
Small Business 
Act and Small 
Business 
Investment Act of 
1958, 
amendments. 
15 u s e 633. 
Repeals. 
15 u s e 636. 
Appropriation 
authorization. 
15 u s e 631 note. 
15 u s e 695, 
696. 
15 u s e 681. 
15 u s e 694a. 
91 STAT. 554 
PUBLIC LAW 95-89—AUG. 4, 1977 
"(7) For the programs authorized by sections 7(b)(3), 7(b)(4) 
15 use 636. 
7(b) (5), 7(b) (6), 7(b) (7), 7(b) (8), 7(b) (9), and 7(g) of this Act, 
the Administration is authorized to enter into $300,000,000 in loans, 
guarantees, and other obligations or commitments. 
"(8) For the programs authorized in sections 404 and 405 of the 
15 use 694-1, 
Small Business Investment Act of 1958, the Administration is author-
694-2. 
ized to enter into guarantees not to exceed $150,000,000. 
"(9) There are hereby authorized to be appropriated such sums as 
may be necessary and appropriate for the carrying out of the provisions 
and purposes, except for administrative expenses, of sections 7(b) (1) 
V 
and 7 (b)(2) of this Act. 
" (c) There are authorized to be appropriated to the Administration 
for fiscal year 1978, $1,400,000,000 to carry out the programs referred to 
in subsection (b), paragraphs (1) through (9). Of such sum, $47,100,-
000 shall be available for the purpose of carrying out the provisions of 
15 use 694c. 
section 412 of the Small Business Investment Act of 1958, $4,000,000 
shall be available for the purpose of carrying out the provisions of 
15 use 694. 
section 403 of the Small Business Investment Act of 1958, and 
$171,000,000 shall be available for salaries and expenses of the Admin-
istration, of which amount— 
"(1) $13,000,000 shall be available for procurement assistance, 
-':: 
with priority given to developing a small business procurement 
; • 
• 
source data bank and to employing additional procurement officers 
to increase the number and total value of set-asides, including 
15 use 637. 
those under section 8(a) of this Act; 
"(2) $32,000,000 shall be available for management and tech-
nical assistance, with priority given to development of effective 
training programs and counseling services, development of small 
business development centers and development of an effective small 
business technology transfer program; 
"(3) $6,000,000 shall be available for research and advocacy, 
with priority given to developing a small business economic data 
base, evaluating the required resources for a major small business 
economic research and analysis unit in the Administration, under-
taking such economic research and analysis, representing the in-
terests of small business within the Federal Government, and 
developing a small business ombudsman function to help solve 
small business problems that are caused by programs, regulations, 
or general activities of the Federal Government and of which 
no more than $60,000 can be used for the payment of travel and 
transportation of persons for the national, regional, and Small 
Business Investment Companies advisory council meetings; 
" (4) $4,000,000 shall be available for the office of minority small 
business; and 
"(5) $3,900,000 shall be available for data management with 
priority given to more effective and efficient utilization of existing 
data management resources of the Administration. 
"(d) The Administrator may transfer no more than 10 percent of 
program levels for salaries and expenses authorized in paragraphs (1) 
Ante, p. 553. 
through (5) of section 20(c) of this Act: Provided, however, That no 
program level authorized in such paragraphs may be increased more 
than 20 percent by any such transfers. 
"(e) The following program levels are authorized for fiscal year 
1979: 
PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 555 
"(1) For the proonuus authorized by section 7(a) of this Act, the 15 USC 636. 
Administration is authorized to make $440,000,000 in direct loans. 
$17,000,000 in innnediate participation loans, and $3,300,000,000 in 
deferred participation loans. 
"(2) For the programs authorized by section 7(h) of this Act, the 
Administration is authorized to make $33,000,000 in direct and imme-
diate participation loans and $22,000,000 in guaranteed loans. 
"(3) For the programs authorized by section 7(i) of this Act, the 
Administration is authorized to make $66,000,000 in direct and imme-
diate participation loans and $89,000,000 in guaranteed loans. 
"(4) For the programs authorized by sections 501 and 502 of the 
Small Business Investment Act of 1958, the Administration is author- 15 USC 695, 
ized to make $49,000,000 in direct and immediate participation loans 696. 
and $45,000,000 in guaranteed loans. 
"(5) For the programs authorized by title III of the Small Busi-
ness Investment Act of 1958, the Administration is authorized to make 15 USC 681. 
$22,000,000 in direct purchase of debentures and preferred securities 
and to make $198,000,000 in guarantees of debentures. 
"(6) For the programs authorized by part B of title IV of the 
Small Business Investment Act of 1958, the Administration is author- 15 USC 694a. 
ized to enter into guarantees not to exceed $2,200,000,000. 
"(7) For the programs authorized by sections 7(b)(3), 7(b)(4), 
7(b) (5), 7(b) (6), 7(b) (7), 7(b) (8), 7(b) (9), and 7(g) of this Act, 
the Administration is authorized to enter into $330,000,000 in loans, 
guarantees, and other- obligations or commitments. 
"(8) For the programs authorized in sections 404 and 405 of the 
Small Business Investment Act of 1958, the Administration is author- 15 USC 694-1, 
ized to enter into guarantees not to exceed $300,000,000. 
694-2. 
"(9) There are hereby authorized to be appropriated such sums as 
may be necessary and appropriate for the carrying out of the provi-
sions and purposes, excejit for administrative expenses, of sections 
7(b)(1) and 7(b) (2) of this Act. 
"(f) There are authorized to be appropriated to the Administration 
for fiscal year 1979, $1,565,000,000 to carry out the programs referred 
to in subsection (e), paragraphs (1) through (9). Of such sum, 
$52,100,000 shall be available for the purpose of carrying out the pro-
visions of section 412 of the Small Business Investment Act of 1958, 15 USC 694c. 
$4,400,000 shall be available for the purpose of carrying out the pro-
visions of section 403 of the Small Business Investment Act of 1958, 15 USC 694. 
and $188,000,000 shall be available foi- salaries and expenses of the 
Administration, of which amount— 
"(1) $14,300,000 shall be available for procurement assistance, 
with priority given to developing a small business procurement 
t 
source data bank and to employing additional procurement offi-
cers to increase the number and total value of set-asides, including 
those under section 8(a) of this Act; 
15 USC 637. 
" (2) $35,200,000 shall be available for management and techni-
cal assistance, with priority given to development of effective 
training programs and counseling services, development of small 
business development centers, and development of an effective 
small business technology transfer program; 
"(3) $6,600,000 shall be available for research and advocacy, 
with priority given to developing a small business economic data 
base, evaluating the required resources for a major small business 
economic research and analysis unit in the Administration, under-
91 STAT. 556 
PUBLIC LAW 95-89—AUG. 4, 1977 
Ante, p. 553. 
Lease guarantees. 
15 use 694. 
15 use 692. 
15 use 694-2. 
15 use 694-1. 
15 use 694c. 
taking such economic research and analysis, representing the 
interests of small business within the Federal Government, and 
developing a small business ombudsman function to help solve 
small business problems that are caused by programs, regulations, 
or general activities of the Federal Government and of which no 
more that $66,000 can be used for the payment of travel and 
transportation of persons for the national, regional, and Small 
Business Investment Companies advisory council meetings; 
" (4) $4,400,000 shall be available for the office of minority small 
business; and 
"(5) $4,290,000 shall be available for data management with 
priority given to more effective and efficient utilization of exist-
ing data management resources of the Administration. 
"(g) The Administrator may transfer no more than 10 percent of 
program levels for salaries and expenses authorized in paragraphs 
(1) through (5) of section 20(f) oi this Act: Provided, 
however, 
That 
no program level authorized in such paragraphs may be increased 
more than 20 percent by any such transfers.''. 
SEC. lOo. Section 403 of the Small Business Investment Act of 1958 
is amended to read as follows: 
" F U N D 
..• 
. 
• 
"SEC. 403. There is hereby created within the Treasury a separate 
fund for guarantees which shall be available to the Administrator 
without fiscal year limitations as a revolving fund for the purposes 
of section 401. All amounts received by the Administrator, including 
any moneys, property, or assets derived by him from his operations in 
connection with section 401, shall be deposited in the fund. All 
expenses, excluding administrative expenses, pursuant to operations 
of the Administrator under section 401 shall be paid from the fund.". 
SEC. 104. Section 405 of the Small Business Investment Act of 1958 
is amended to read as follows: 
"FUND 
"SEC. 405. There is hereby created within the Treasury a separate 
fund for guarantees which shall be available to the Administrator 
without fiscal year limitations as a revolving fund for the purpose of 
section 404. All amounts received by the Administrator, including 
any moneys, property, or assets derived by him from his operations 
in connection with section 404 shall be deposited in the fund. All 
expenses and payments, excluding administrative expenses, pursuant 
to operations of the Administrator under section 404 shall be paid 
from the fund.". 
SEC. 105. Section 412 of the Small Business Investment Act of 1958 
is amended to read as follows: 
"FUND 
"SEC. 412. There is hereby created within the Treasury a separate 
fund for guarantees which shall be available to the Administrator 
without fiscal year limitation as a revolving fund for the purposes 
of this part. All amounts received by the Administrator, including 
any moneys, property, or assets derived by him from his operations 
in connection with this part, shall be deposited in the fund. All 
expenses and payments, excluding administrative expenses, pursuant 
to operations of the Administrator under this part shall be paid from 
PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 557 
the fund. Moneys in the fund not needed for the payment of current 
operating expenses or for the payment of claims arising under this 
part may be invested in bonds or other obligations of, or bonds or 
other obligations guaranteed as to principal and interest by, the 
United States; except that moneys provided as capital for the fund 
shall not be so invested.". 
SEC. 106. This title shall become effective on October 1, 1977. 
TITLE II—MISCELLANEOUS CONFORMING AND 
TECHNICAL AMENDMENTS 
SEC. 201. Section 4(c) (2) of the Small Business Act is amended by 
striking out "and 7(c) (2)" and by inserting in lieu thereof "7(c) (2), 
and 7(g)". 
SEC. 202. Sections 4(c) (5) and 4(c) (6) of the Small Business Act 
are redesignated as sections 4(c)(4) and 4(c)(5), respectively, and 
the new section 4(c) (4) is amended to read as follows: 
" (4) The Administration shall submit to the Committees on Appro-
priations, Senate Select Committee on Small Business, and the Com-
mittee on Small Business of the House of Representatives, as soon as 
possible after the beginning of each calendar quarter, a full and com-
plete report on the status of each of the funds established by para-
graph (1). Business-type budgets for each of the funds established 
by paragraph (1) shall be prepared, transmitted to the Committees 
on Appropriations, the Senate Select Committee on Small Business, 
and the Committee on Small Business of the House of Representatives, 
and considered, and enacted in the manner prescribed by law (sections 
102, 103, and 104 of the Government Corporation Control Act (31 
U.S.C. 847-849)) for wholly owned Government corporations.". 
SEC. 203. Section 10(a) of the Small Business Act is amended by 
inserting "the Senate Select Committee on Small Business," after the 
clause "the President of the Senate,". 
SEC. 204. Section 10(b) of the Small Business Act is amended by 
striking out "House Select Committee to Conduct a Study and 
Investigation of the Problems of Small Business" and by inserting 
in lieu thereof "Committee on Small Business of the House of 
Representatives". 
SEC. 205. Section 10(c)(2) of the Small Business Act is amended 
by inserting ", the Senate Select Committee on Small Business" after 
the word "Congress". 
SEC. 206. Section 10(d) of the Small Business Act is amended by 
inserting "the Senate Select Committee on Small Business," after the 
clause "the President of the Senate,". 
SEC. 207. Section 10(e) of the Small Business Act is amended by 
striking out "House Select Committee To Conduct a Study and 
Investigation of the Problems of Small Business" and by insert-
ing in lieu thereof "Committee on Small Business of the House of 
Representatives". 
SEC. 208. Section 10(g) of the Small Business Act is amended by 
striking out "Committee on Banking, Housing and Urban Affairs of 
the Senate and the Committee on Banking and Currency of the House 
of Representatives" and inserting in lieu thereof "Senate Select Com-
mittee on Small Business and Committee on Small Business of the 
House of Representatives." 
; 
Effective date. 
15 u s e 633 note. 
15 u s e 633. 
Report to 
congressional 
committees. 
Budgets, 
transmittal to 
congressional 
committees. 
15 u s e 639. 
Reporting 
requirements and 
agency 
cooperation. 
91 STAT. 558 
PUBLIC LAW 95-89—AUG. 4, 1977 
15 use 682. 
SEC. 209. Section 5316 of title 5, United States Code, is amended 
by striking from paragraph (11) the figure " ( 3 ) " and by inserting 
the figure "(4)". 
SEC. 210. Section 302(b) of the Small Business Investment Act 
of 1958 is amended by inserting the word "and'* between the words 
"capital" and "surplus". 
SEC. 211. Section 10(a) of the Small Business Act (15 U.S.C. 
639(a)) is amended by adding at the end thereof the following new 
sentence: "With respect to minority small business concerns, the report 
shall include the proportion of loans and other assistance under this 
Act provided to such concerns, the goals of the Administration for the 
next fiscal year with respect to such concerns, and recommendations 
for improving assistance to minority small business concerns under this 
Act.''. 
15 use 636. 
Payment 
obligation, 
undertaking or 
suspension. 
15 use 634. 
Loan maturity, 
extension. 
Repayment 
agreement. 
T I T L E I I I — A M E N D M E N T S TO SMALL B U S I N E S S 
A D M I N I S T R A T I O N LOAN A U T H O R I T Y 
SEC. 301. Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
is amended after "the acquisition of land;" by inserting "or to finance 
residential or commercial construction or rehabilitation for sale: Pro-
vided^ however^ That such loans shall not be used primai-ily for the 
acquisition of land;". 
SEC. 302. Section 7(b) (5) of the Small Business Act is amended by 
inserting immediately after "any Federal law" the words "heretofore 
or lioreafter enacted'*. 
SEC. 303. Section 5 of the Small Business Act is amended by adding 
at the end thereof the following new subsection: 
"(e)(1) Subject to the requirements and conditions contained in this 
subsection, upon application by a small business concern which is the 
recipient of a loan made under this Act, the Administration may under-
take the small business concern*s obligation to make the required pay-
ments under such loan or may suspend such obligation if the loan was 
a direct loan made by the Administration. While such payments are 
being nuuie by the Administration pursuant to the undertaking of such 
obligation or while such obligation is suspended, no such payment with 
respect to the loan may be required from the small business concern. 
"(2) The Administration may undertake or suspend for a period 
of not to exceed 5 years any small business concern's obligation under 
this subsection only if— 
"(A) without such undertaking or suspension of the obligation, 
the small business concern would, in the sole discretion of the 
Administration, become insolvent or remain insolvent; 
"(B) with the undertaking or suspension of the obligation, the 
small business concern would, in the sole discretion of the Adminis-
stration, become or remain a viable small business entity; and 
"(C) the small business concern executes an agreement in writ-
ing satisfactory to the Administration as provided by para-
graph (4). 
"(3) Notwithstanding the provisions of sections 7 ( a ) ( 4 ) ( C ) and 
7 (i) (1) of this Act, the Administration may extend the maturity of any 
loan on which the Administration undertakes or suspends the obliga-
tion pursuant to this subsection for a corresponding period of time. 
" (4) (A) Prior to the undertaking or suspension by the Administra-
PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 559 
tioii of any small business concern's obligation under this subsection, 
the Administration, consistent with the purposes sought to be achieved 
herein, shall require the small business concern to agree in writing to 
repay to it the aggregate amount of the payments which were required 
under the loan during the period for which such obligation was under-
taken or suspended, either— 
"(i) by periodic payments not less in amount or less frequently 
falling due than those which were due under the loan during such 
period, or 
"(ii) pursuant to a repayment schedule agreed upon by the 
- 
Administration and the small business concern, or 
"(iii) by a combination of the payments described in clause (i) 
and clause (ii). 
"(B) In addition to requiring the small business concern to execute 
the agreement described in subparagraph (A), the Administration 
shall, prior to the undertaking or suspension of the obligation, take 
such action, and require the small business concern to take such action 
as the Administration deems appropriate in the circumstances, includ-
ing the provision of such security as the Administration deems neces-
sary or appropriate to insure that the rights and interests of the 
lender (Small Business Administration or participant) will be safe-
guarded adequately during and after the period in which such obliga-
tion is so undertaken or suspended. 
"(5) The term 'required payments' with respect to any loan means 
payments of principal and interest under the loan.". 
SEC. 304. Section 4(c) of the Small Business Act is amended by 
inserting in paragraphs (1)(A) and (2) (A) thereof "5(e)," after the 
word "sections". 
"Required 
payments." 
15 use 633. 
TITLE 
IV—AMENDMENTS TO SMALL 
BUSINESS 
ADMINISTRATION DISASTER LOAN AUTHORITY 
SEC. 401. Section 4(c) of the Small Business Act is amended as 
follows: 
(1) by inserting in paragraph (1) (A) after the figure 
"7(b)(2)," the figure "7(b)(3)," and by striking from para-
graph (1) (B) thereof the figure "7(b) (8),"; and 
(2) by inserting in paragraph 
(2) (A) after the figure 
"7(b)(2)," the figure "7(b)(3)," and by striking from para-
graph (2) (B) thereof the figure "7(b) (3),". 
SEC. 402. Section 7(b) (3) of the Small Business Act is amended by 
striking "federally aided urban renewal program or a highway proj-
ect or any other construction constructed by or with funds provided in 
whole or in part by the Federal Government" and by inserting in lieu 
thereof "program or project constructed by or with funds provided 
in whole or m part by the Federal Government or by a program or 
project by a State or local government or public service entity, pro-
viding such government or public service entity has the authority to 
exercise the right of eminent domain on such program or project". 
SEC. 403. Section 7(b)(2) of the Small Business Act is amended 
by adding "or" after the semicolon at the end of section 7(b) (2) (B) 
and by adding the following: 
"(C) a disaster, as determined by the Administrator of the 
Small Business Administration pursuant to the Disaster Relief 
Act of 1970: or 
15 use 636. 
42 use 4401 
note. 
29-194 
0 - 8 0 
91 STAT. 560 
PUBLIC LAW 95-89—AUG. 4, 1977 
Certification by 
State Governor. 
Loans. 
Interest rate. 
Economic 
dislocation. 
15 u s e 636. 
Loans. 
Certification by 
State Governor. 
Deferral of 
payment. 
Disaster loans, 
interest rate. 
"(D) if no disaster declaration has been issued pursuant to 
subparagraph (A), (B), or (C), the Governor of a State in 
which a disaster has occurred may certify to the Small Business 
? 
Administration that small business concerns (1) have suffered 
economic injury as a result of such disaster, and (2) are in need 
of financial assistance which is not available on reasonable terms 
in the disaster striclcen area. Upon receipt of such certification, 
the Administration may then make such loans as would have been 
available under this paragraph if a disaster declaration had been 
issued. 
" ( E ) Notwithstanding any other provision of law, the interest 
rate on the Administration's share of any loan made under this 
paragraph in connection with a disaster occurring on or after 
July 1, 1976, and prior to October 1, 1978, shall be 3 percent on 
the amount of such loan not exceeding $25,000.". 
SEC. 404. Section 7(b) of the Small Business Act is amended by 
striking out "and" at the end of paragraph (7), by striking out the 
period at the end of paragraph (8) and inserting in lieu thereof "; 
and" and by inserting after paragraph 
(8) the following new 
paragraph: 
"(9) to make such loans (either directly or in cooperation with 
banks or other lending institutions through agreements to par-
ticipate on an immediate or deferred basis) as the Administration 
may determine to be necessary to assist, or refinance the existing 
indebtedness of, any small business concern located in an area of 
economic dislocation. The Governor of a State may certify to the 
Administration (A) that small business concerns within the State 
have suffered substantial economic injury as a result of an eco-
nomic dislocation, and (B) that such concerns are in need of 
financial 
assistance which is not available on reasonable terms. 
For the purposes of this paragraph, economic dislocation includes 
extraordinary, severe, and temporary natural conditions or other 
economic dislocations as determined by the Administration. Such 
economic dislocations must be of such magnitude that without the 
benefit of loans provided hereunder a significant number of other-
wise financially sound small businesses in the impacted regions or 
business sectors would either become insolvent or be unable to 
return quickly to their former level of operation. No loan made 
hereunder shall exceed $100,000, nor shall the proceeds thereof be 
used to reduce the exposure of any other lender. The Administra-
tion shall permit deferral of payment of principal and interests 
for one year on loans made hereunder.". 
SEC. 405. Section 7(b) of the Small Business Act is amended by 
inserting at the end of the first undesignated paragraph the follow-
ing: "Notwithstanding any other provision of law, the interest rate 
on the Administration's share of any loan made pursuant to para-
graph (1) of this subsection to repair or replace a primary residence 
and/or replace or repair damaged or destroyed personal property, less 
the amount of compensation by insurance or otherwise, with respect 
to a disaster occurring on or after July 1, 1976, and prior to October 1, 
1978, shall be: 1 per centum on the amount of such loan not exceeding 
$10,000, and 3 per centum on the amount of such loan over $10,000 but 
not exceeding $40,000. The interest rate on the Administration's share 
of the first $250,000 of all other loans made pursuant to paragraph 
(1) of this subsection, with respect to a disaster occurring on or after 
July 1, 1976, and prior to October 1, 1978, shall be 3 per centum. All 
< 
* ' « 
PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 561 
repayments of principal on the Administration's share of any loan 
made under the above provisions shall first be applied to reduce the 
principal sum of such loan which bears interest at the lower rates pro-
vided in this para<i;raph. The principal amount of any loan made 
pursuant to paragraph (1) in connection with a disaster which occurs 
on or after April 1, 1977, but prior to January 1, 1978, may be 
increased by such amount, but not more than $2,000, as the Adminis-
tration determines to be reasonable in light of the amount and nature 
of loss, damage, or injury sustained in order to finance the installa-
tion of insulation in the property which was lost, damaged, or injured, 
if the miinsured, damaged portion of the property is 10 per centum 
or more of the market value of the property at the time of the disaster. 
Not later than June 1. 1978, the Administration shall prepare and 
transmit to the Select Committee on Small Business of the Senate, the 
Committee on Small Business of tlie House of Representatives, and 
the Committees of the Senate and House of Representatives having 
jurisdiction over measures relating to energy conservation, a report on 
its activities under this paragraph, including therein an evaluation of 
the effect of such activities on encouraging the installation of insula-
tion in property which is repaired or replaced after a disaster which 
is subject to this paragraph, and its recommendations with respect 
to the continuation, modification, or termination of such activities.". 
SEC. 406. Section 824 of the Consolidated Farm and Rural Develop-
ment Act is amended as follows: 
(a) by inserting " (a)" at the beginning thereof and by striking 
the proviso at the end thereof; and 
(b) by inserting the following at the end thereof: 
"(b) Notwithstanding the provisions of any other law, during any 
period in which the Small Business Administration is making loans 
under sections 7(b)(1) and 7(b)(2) of the Small Business Act to 
businesses at a rate of interest below the average annual interest rate 
on all interest-bearing obligations of the United States, loans made 
hereunder shall bear interest at a rate not to exceed such lower interest 
rates in amounts not to exceed $250,000 to businesses and $40,000 to 
homeowners. 
"(c) Any political subdivision of a State with a population of less 
than 10,000 which, if such subdivision had a population of 10,000 or 
more, would be eligible for a grant under the first title of the Com-
munity Emergency Drought Relief Act of 1977 shall be eligible for a 
grant under the Consolidated Farm and Rural Development Act 
during any period in which such Community Relief Act of 1977 is or 
has been in effect.". 
Principal, 
increase. 
Report, 
transmittal to 
congressional 
committees. 
7 use 1964. 
Interest rate. 
15 use 636. 
Grant eligibility. 
42 
use 
5184 
note. 
7 
use 
1921 
note. 
TITLE V—PROCUREMENT ASSISTANCE 
SEC. 501. Section 8(b) of the Small Business Act is amended by 
striking paragraph 
(7) and by inserting in lieu thereof the 
following: 
" (7) (A) To certify to Government procurement officers, and officers 
engaged in the sale and disposal of Federal property, with respect to 
all elements of responsibility, including, but not limited to, capability, 
competency, capacity, credit, integrity, perseverance, and tenacity, 
of any small business concern or group of such concerns to receive 
and perform a specific Government contract. A Government procure-
eontracts. 
15 use 637. 
Referral for final 
disposition. 
91 STAT. 562 
PUBLIC LAW 95-89—AUG. 4, 1977 
Ineligibility, 
notification. 
Review. 
Awards or 
contracts, 
determination. 
15 use 644. 
Report to 
congressional 
committees. 
Contract awards, 
priority. 
iiieiit officer or an officer engaged in the sale and disposal of Federal 
property may not, for any reason specified in the preceding sentence, 
preclude any small business concern or group of such concerns from 
being awarded such contract without referring the matter for a final 
disposition to the Administration. 
"(B) If a Government procurement officer finds that an otherwise 
qualified small business concern may be ineligible due to the provisions 
of section 35(a) of title 41, United States Code (the Walsh-Healey 
Public Contracts Act), he shall notify the Administration in writing 
of such finding. The Administration shall review such finding and 
shall either dismiss it and certify the small business concern to be an 
eligible Government contractor for a specific Government contract 
or if it concurs in the finding, forward the matter to the Secretary of 
Labor for final disposition, in which case the Administration may 
certify the small business concern only if the Secretary of Labor finds 
the small business concern not to be in violation. 
"(C) In any case in which a small business concern or group of such 
concerns has been certified by the Administration pursuant to (A) 
or (B) to be a responsible or eligible Government contractor as to a 
specific Government contract, the officers of the Government having 
procurement or property disposal powers are directed to accept such 
certification as conclusive, and shall let such Government contract to 
such concern or group of concerns without requiring it to meet any 
other requirement of responsibility or eligibility.-'. 
SEC. 502. Section 15 of the Small lousiness Act is amended by insert-
ing "(a)" innnediately after "SKC. 15." and by inserting the following 
at the end thereof: 
"(b) With respect to any work to be performed the amount of which 
would exceed the maximum amount of any contract for which a surety 
may be guaranteed against loss under section 411 of the Small Busi-
ness Investment Act of 1958 (15 U.S.(^. 694(b)), the contracting pro-
curement agency shall, to the extent practicable, place contracts so as 
to allow more than one small business concern to perform such work. 
"(c) During fiscal year 1978, public and private organizations and 
individuals eligible for assistance under section 7(h) of this Act shall 
be eligible to participate in such contracts or any part thereof in an 
aggregate amount not to exceed $100,000,000: Provided^ h(ywever, That 
the Administration, not later than March 1, 1979, shall prepare and 
transmit to the Select Committee on Small Business of the Senate 
and the Committee on Small Business of the House of Representatives, 
a report on the impact of contracts awarded to such organizations and 
individuals on small business. 
"(d) For purposes of this section priority shall be given to the 
awarding of contracts and the placement of subcontracts to concerns 
which shall perform a substantial proportion of the production on 
those contracts and subcontracts within areas of concentrated unem-
ployment or underemployment or within labor surplus areas. Not-
withstanding any other provision of law, total labor surplus area 
set-asides pursuant to Defense Manpower Policy Number 4 (32A 
C.F.R. Chapter 1) or any successor policy shall be authorized if the 
Secretary or his designee specifically determines that there is a 
reasonable expectation that offers will be obtained from a sufficient 
r.umber of eligible concerns so that awards will be made at reasonable 
prices. As soon as practicable and to the extent possible, in determin-
ing labor surplus areas, consideration shall be given to those persons 
PUBLIC LAW 95-89—AUG. 4, 1977 
91 STAT. 563 
who would be available for employment were suitable employment 
available. Until such definition reflects such number, the present 
criteria of such policy shall govern. 
"(e) In carrying out labor surplus areas and small business set- 
; ; , ^
, 
aside programs, departments, agencies, and instrumentalities of the 
executive branch shall award contracts, and encourage the placement 
S 
of subcontracts for procurement to the following in the manner and 
in the order stated: 
"(1) Concerns which are located in labor surplus areas, and 
which are also small business concerns, on the basis of a total set-
aside. 
, 
' 
' 
"(2) Concerns which are small business concerns on the basis 
of a total set-aside. 
"(3) Concerns which are small business concerns, on the basis 
of a partial set-aside. 
"(4) Concerns which are located in labor surplus areas on the 
basis of a total set-aside. 
"(f) The provisions of subsections (d) and (e) shall cease to be Termination, 
effective subsequent to September 30, 1979, unless renewed prior to 
such date.". 
Approved August 4, 1977. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-1 (Comm. on Small Business) and No. 95-535 (Comm. of 
Conference). 
SENATE REPORT No. 95-184 accompanying S. 1442 (Comm. on Small Business). 
CONGRESSIONAL RECORD, Vol. 123 (1977): 
Feb. 9, considered and passed House. 
May 19, considered and passed Senate, amended, in lieu of S. 1442. 
July 26, House agreed to conference report. 
July 27, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 32: 
Aug. 4, Presidential statement.