An Act to amend the Small Business Act to reduce the interest rate on Small Business Administration disaster loans
PL 92-385 (H.R.15692), enacted 08/16/1972

554 
PUBLIC LAW 92-385-AUG. 16, 1972 
[86 STAT. 
August 16, 1972 
[H. R. 15692] 
Public Law 92-385 
AN ACT 
To authorize for a limited period additional loan assistance under the Small 
Business Act for disaster victims, to provide for a study and report to the 
Congress by the President setting forth recommendations for a compreliensive 
revision of disaster relief legislation, and for other purposes. 
Disaster relief. 
Additional as-
sistance; study 
and report. 
72 Stat. 389; 
79 Stat. 206. 
Maximum inter-
est rate. 
Federal share. 
Be it enacted hy the SeriMe and House of Representatives 
of the 
United States of America in Congress assembled, That (a) subsection 
(b) of section 7 of the Small Business Act (15 U.S.C. 686(b)) is 
amended by striking out the matter following the numbered para-
graphs and inserting in lieu thereof the following: 
"No loan under this subsection, including renewals and extensions 
thereof, may be made for a period or periods exceeding thirty years: 
Provided^ That the Administrator may consent to a suspension in the 
payment of principal and interest charges on, and to an extension in 
the maturity of, the Federal share of any loan under this subsection 
for a period not to exceed five years, if (A) the borrower under such 
loan is a homeowner or a small business concern, (B) the loan was 
made to enable (i) such homeowner to repair or replace his home, or 
(ii) such concern to repair or replace plant or equipment which was 
damaged or destroyed as the result of a disaster meeting the require-
ments of clause (A) or (B) of paragraph (2) of this subsection, and 
(C) the Administrator determines such action is necessary to avoid 
severe financial hardship: Provided further^ That the provisions of 
paragraph (1) of subsection (c) of this section shall not be applicable 
to any such loan having a maturity in excess of twenty years. Not-
withstanding the provisions of any other law, and except as otherwise 
provided in this subsection, the interest rate on the Administration's 
share of any loan made under this subsection shall not exceed 3 per 
centum per annum, except that in the case of a loan made pursuant 
to paragraph (3), (5), (6), or (7), the rate of interest on the Admin-
istration's share of such loan shall not be more than the higher of 
(A) 2% per centum per annum; or (B) the average annual interest 
rate on all interest-bearing obligations of the United States then form-
ing a part of the public debt as computed at the end of the fiscal year 
next preceding the date of the loan and adjusted to the nearest one-
eighth of 1 per centum plus one-quarter of 1 per centum per annum. In 
agreements to participate in loans on a deferred basis under this sub-
section, such participation by the Administration shall not be in excess 
of 90 per centum of the balance of the loan outstanding at the time of 
disbursement. 
"In the administration of the disaster loan program under para-
graphs (1), (2), and (4) of this subsection, in the case of property loss 
or damage or injury resulting from a major disaster as determined by 
the President or a disaster as determined by the Administrator which 
occurs on or after January 1,1971, and prior to July 1,1973, the Small 
Business Administration, to the extent such loss or damage or injury 
is not compensated for by insurance or otherwise— 
"(A) may make any loan for repair, rehabilitation, or replace-
ment of property damaged or destroyed without regard to 
whether the required financial assistance is otherwise available 
from private'sources; 
"(B) may, in the case of the total destruction or substantial 
property damage of a home or business concern, refinance any 
mortgage or other liens outstanding against the destroyed or 
damaged property if such property is to be repaired, rehabilitated, 
or replaced, except that (1) in the case of a business concern, the 
amount refinanced shall not exceed the amoimt of the physical 
86 STAT.] 
PUBLIC LAW 92-385-AUG. 16, 1972 
555 
loss sustained, and (2) in the case of a home, the amount of each 
monthly payment of principal and interest on the loan after 
refinancing under this clause shall be not less than the amount of 
each such payment made prior to such refinancing; 
"(C) may, in the case of a loan made under clause (A) or 
a mortgage or other lien refinanced under clause (B) in con-
nection with the destruction of, or substantial damage to, prop-
erty owned and used as a residence by an individual who by 
reason of retirement, disability, or other similar circumstances 
relies for support on survivor, disability, or retirement benefits 
under a pension, insurance, or other program, consent to the sus-
pension of the payments of the principal of that loan, mortgage, 
or lien during the lifetime of that individual and his spouse for so 
long as the Administration determines that making such payments 
wouJd constitute a substantial hardship; 
"(D) shall, notwithstanding the provisions of any other law 
and upon presentation by the applicant of proof of loss or dam-
age or injury and a bona fide estimate of cost of repair, rehabilita-
tion, or replacement, cancel the principal of any loan made to 
cover a loss or damage or injury resulting from such disaster, 
except that— 
"(i) with respect to a loan made in connection with a dis-
aster occurring on or after January 1, 1971 but prior to Jan-
uary 1, 1972, the total amount so canceled shall not exceed 
$2,500, and the interest on the balance of the loan shall be at a 
rate of 3 per centum per annum; and 
"(ii) with respect to a loan made in connection with a dis-
aster occurring on or after January 1,1972 but prior to July 1, 
1973, the total amount so canceled shall not exceed $5,000, and 
the interest on the balance of the loan shall be at a rate of 1 
per centum per annum. 
With respect to any loan referred to in clause (D) which is outstand-
ing on the date of enactment of this paragraph, the Administrator 
shall— 
" (i) make such change in the interest rate on the balance of such 
loan as is required under that clause effective as of such date of 
enactment; and 
"(ii) in applying the limitation set forth in that clause with 
respect to the total amount of such loan which may be canceled, 
consider as part of the amount so canceled any part of such loan 
which was previously canceled pursuant to section 231 of the 
Disaster Belief Act of 1970. 
"Whoever wrongfully misaj)plies the proceeds of a loan obtained 
under this subsection shall be civilly liable to the Administrator in an 
amount equal to one-and-one-half times the original principal amount 
of the loan." 
(b) The last paragraph of the amendment made by subsection (a) 
shall apply only with respect to loans made on or after the date of 
enactment of this Act. 
(c) Any person who (1) suffers any loss or damage as a result of a 
major disaster as determined by the President which occurred prior to 
the date of enactment of this Act, (2) is eligible for assistance under 
the amendment made by subsection (a), and (3) is otherwise eligible 
for benefits greater than those provided by the amendment made by 
subsection (a), may elect to receive such greater benefits. 
SEC. 2. (a) Section 7(b) of the Small Business Act is amended— 
(1) by striking out the period at the end of paragraph (6) and 
inserting in lieu thereof "; and"; and 
(2) by inserting after paragraph (6) a new paragraph as 
follows: 
Post, p. 559. 
Penalty. 
Effective date. 
Eligibility. 
72 Stat. 389; 
84 Stat. 1618. 
15 u s e 636. 
556 
PUBLIC LAW 92-385-AUG. 16, 1972 
[86 STAT. 
"(7) 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 Administra-
tion may determine to be necessary or appropriate to assist, or 
to refinance the existing indebtedness of, any small business con-
cern directly and seriously affected by the significant reduction 
of the scope or amount of Federal support for any project as a 
result of any international agreement limiting the development 
of strategic arms or the installation of strategic arms or strategic 
arms facilities, if the Administration determines that such con-
cern is likely to suffer substantial economic injury without assist-
ance under this paragraph.". 
Jl^ll^\^\\^'' 
(b) Section 4(c) of the Small Business Act (15 XT.S.(\ 683(c)) is 
15 use 633. 
amended— 
(1) by inserting "7(b)(7)," immediately after "7(b)(6)," in 
paragraph (1) thereof; and 
(2) by inserting "7(b)(5), 7(b)(6), 7(b)(7)," immediately 
after "7(b)(4)," in paragraph (2) (A) thereof. 
Disaster relief 
gj,^^ 3^ 'pj^^ President shall conduct a thorough review of existing 
legislation, Presi- 
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p ^ 
• t 
• 
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, ^ 
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• 
dentiai review. 
disaster relief legislation, and not later than January 1, 19(6, he shall 
Report to Con- 
transmit to the Congress a report containing specific legislative pro-
^'^ ' 
posals for the comprehensive revision of such legislation in order to— 
(1) standardize the amount of benefits lavailable to persons 
affected by disasters so as to achieve fairness and consistency with 
; regard to the amount of benefits provided to such persons and to 
preclude the need for separate legislation to aid persons affected 
by future disasters; 
(2) improve the execution of the Government's disaster relief 
program by eliminating unnecessary administrative procedures 
, J and reducing the number of agencies involved in disaster relief 
or increasing individual agency authority and responsibility; and 
(3) prevent the misuse of benefits made available under the 
program. 
educauo°naMns''t!-^ 
SEC. 4. (a) The Cougress hereby finds and declares that there has 
tutions. 
been substantial damage to educational institutions as a result of 
hurricane and tropical storm Agnes; that disaster relief for public 
educational institutions is adequately covered by legislation heretofore 
enacted; that nonprofit private educational institutions are not pro-
vided disaster relief benefits comparable to those provided to public 
educational institutions; that nonprofit private educational institu-
tions have a secular educational mission; that students attending 
...i? .: . V . 
nonprofit private educational institutions that have been damaged or 
destroyed will have to be provided for in public institutions if the 
former institutions are not restored; and that these facts compel 
enactment of special measures designed to provide nonprofit private 
educational institutions which were victims of this catastrophe with 
T
- h . itasr, -; disaster relief benefits comparable to those provided for public educa-
tional institutions. 
^Damages^ft^m 
^\y^ 'JQ ^^Q exteut sucli loss Or damage or destruction is not compen-
Agne'T, gran™. 
sated for by insurance or otherwisej the President may make grants 
to nonprofit private educational institutions in major disaster areas as 
designated by the President for the repair, restoration, reconstruction, 
or replacement of educational facilities, supplies, or equipment which 
have been lost, damaged, or destroyed as a result of hurricane and 
tropical storm Agnes, if such facilities, supplies, or equipment were 
ivgr >rfsi •:; 
owned on the date of such loss, damage, or destruction by an organiza-
tion exempt from taxation under section 501 (c), (d), or (e) of the 
s/st^t^^isss^^' 
Internal Revenue Code of 1954 and the facilities, supplies, or equip-
26 use 501. 
ment were being used to carry out the purposes for which such orga-
nization was accorded that exemption; except that no grant may be 
86 STAT. ] 
PUBLIC LAW 92-385-AUG. 16, 1972 
557 
made under this section for the rejjair, restoration, reconstruction, or 
replacement of any facility for which disaster relief assistance would 
not be authorized under Public Law 81-815, title VII of the Higher 
72 stat. S48. 
Education Act of 1965, or the Disaster Relief Act of 1970 if such 
^."^p.^ss. 
facility were a public facility. 
84 stat. 1744. 
(c) The amount of a ffrant made under this section shall not— 
^^ "^^ '^^^^ 
' 
~ 
note • 
(1) exceed 100 per centum of the cost of— 
(A) repairing, restoring, reconstructing, or replacing any 
facility on the basis of the design of such facility as it existed 
immediately prior to the disaster referred to in subsection (b) 
and in conformity with applicable codes, specifications, and 
standards; and 
(B) repairing, restoring, or replacing equipment 
or 
supplies; 
as they existed immediately prior to such disaster; 
(2) in the case of any facility which was under construction 
when damaged or destroyed as a result of such disaster, exceed 50 
per centum of the cost of restoring such facility substantially to 
its condition prior to such disaster, and of completing construc-
tion not performed prior to such disaster to the extent that the 
cost of completing construction is increased over the original con-
struction cost due to changed conditions resulting from such 
disaster; 
(3) be used to pay any part of the cost of facilities, supplies, 
or equipment which are to be used primarily for sectarian pur-
poses; or 
(4) be used to restore or rebuild any facility used or to be used 
primarily for religious w^orship; replace, restore, or repair any 
equipment or supplies used or to be used primarily for religious 
instruction, or restore or rebuild any facility or furnish any equip-
ment or supplies which are used or to be used primarily in con-
nection with any part of the program of a school or department 
of divinity. 
(d) For the purposes of this section— 
Definitions. 
(1) the term "educational institution" means any elementary 
school (as defined by section 801(c) of the Elementary and Sec-
ondary Education Act of 1965), any secondary school (as defined 
^9 stat. 55; 
by section 801(h) of the Elementary and Secondary Education ^^2o*usc ssi. 
Act of 1965), and any institution of higher education (as defined 
by Fection 1201(a) of the Higher Education Act of 1965); and 82ltat*^\*042^^' 
(2) the term "school or department of divinity" means a school 1050.^ ' 
or department of divinity as defined by section 1201(1) of the 
20 use 1141. 
^ Higher Education Act of i965. 
^"^«' P- 260 • 
SEC. 5. Subtitle C of the Consolidated Farmers Home Administra-
tion Act of 1961, as amended (7 U.S.C. 1961-1967), is amended by 
75 stat. 311; 
adding at the end thereof the following new section: 
^^ ^'^*' "
^
^ 
"SEC. 328. (a) Notwithstanding any other provision of law, in the 
administration of this subtitle and the rural housing loan program 
under section 502 of title V of the Housing Act of 1949, as amended 
(42 U.S.C. 1472), in the case of property loss or damage or injury 79^|tat^497^^' 
resulting from a major disaster as determined by the President or a 
natural disaster as determined by the Secretary of Agriculture which 
occurred after June 30,1971, and prior to July 1,1973, the Secretary— 
"(1) to the extent such loss or damage or injury is not com-
pensated for by insurance or otherwise, (A) shall cancel the 
principal of the loan, except that the total amount so canceled 
shall not exceed the greater of (i) 50 per centum of the original 
principal amount of such loan but not more than $5,000, or (ii) the 
per centum that would be canceled of a loan of the same size by 
the Small Business Administration under section 7(b) of the 
558 
PUBLIC LAW 92^85-AUG. 16, 1972 
[86 STAT. 
Ante. p. 555. 
Small Busliiess Act, as amended (15 U.S.C. B;^B(b)), and (B) 
may defer interest payments or principal payments, or both, in 
whole or in part, on any loan made under this section during the 
first three years of the term of the loan, except that any such 
deferred payments shall bear interest at a rate per annum bo be 
determined by the Secretary of the Treasury under section 234 of 
84 Stat. 1754. 
the Disaster Relief Act of 1970 (42 U.S.C. 4453), or that estab-
lished by the Small Business Administration imder section 7(b) 
of the Small Business Act, as amended (15 U.S.C. 636 (b)), which-
ever is lower: Provided, That no one borrower shall be eligible to 
receive more than one such cancellation for any single disaster. 
"(2) to the extent such loss or damage or injury is not com-
'•'• 
pensated for by insurance or otherwise, may grant any loan for 
repair, rehabilitation, or replacement of property damaged or 
destroyed, without regard to whether the required loan is other-
wise available from private sources: Provided, That in the case 
of any loan for refinancing, either under clause (3) of this sub-
y^js^c'ige"' 
section or under section 322 of this subtitle, require the borrowers 
to demonstrate that they are unable to obtain sufficient credit else-
where to finance their actual needs at reasonable rates and terms, 
taking into consideration prevailing private and cooperative rates 
and terms in the community in or near which the applicant resides 
for loans for similar purposes and periods of time, 
"(3) may, in the case of the total destruction or substantial 
property damage of homes or farm service buildings and related 
structures and equipment, refinance any mortgage or other lien 
outstanding against the destroyed or damaged property if such 
property is to be repaired, rehabilitated, or replaced, except that 
the amount refinanced shall not exceed the amount of the physical 
loss sustained. Any such refinancing shall be subject to the provi-
sions of clauses (1) and (2) of this subsection. 
''(4) shall require the recipient of any emergency loan made 
under this section to execute the agreement to refinance required 
7 use 1983. 
by section 333(c) of this title: Provided, That any such loan 
shall be reviewed at not less than two-year intervals to determine 
if the agreement to refinance shall become applicable. 
"(b) Notwithstanding any other provision of law, the provisions of 
subsection (a) of this section shall also apply to the administration of 
the programs referred to in such subsection in the case of any property 
loss or damage or injury, including loss or damage to agricultural 
crops, resulting from flood or excessive prolonged rain, drought, or 
other natural disaster occurring after June 30, 1971, and prior to 
July 1, 1973, in any area determined by the President to be a major 
disaster area or in any area determined by the Secretary of Agriculture 
to have suffered a natural disaster during such period. 
"(c) Any loan made under this section shall not exceed the current 
cost of repairing or replacing the disaster loss or damage or injury 
in conformity with current codes and specifications. Any loan made 
under this section shall bear interest at a rate per annum to be deter-
mined by the Secretary of the Treasury under section 234 of the 
Disaster Relief Act of 1970 (42 U.S.C. 4453), or that established by 
the Small Business Administration under section 7(b) of the Small 
Business Act, as amended (15 U.S.C. 636(b)), whichever is lower. 
"(d) In the administration of any Federal disaster loan program 
under the authority of this section, the age of any adult loan applicant 
shall not be considered in determining whether such loan should be 
made or the amount of such loan. 
"(e) The benefits provided under this section shall be applicable to 
all loans qualifying hereunder, whether approved before or after the 
date of enactment of this section. 
86 STAT.] 
PUBLIC LAW 92-387-AUG. 16, 1972 
559 
"(f) The President shall conduct a thorough review of existing 
disaster relief legislation as it relates to emergency loans and housing 
loans administered by the Farmers Home Administration of the 
United States Department of Agriculture, and not later than Janu-
ary 31, 1973, he shall transmit to the Committee on Agriculture and 
Forestry of the Senate and the Committee on Agriculture of the 
House of Representatives a report containing specific legislative pro-
posals for the comprehensive revision of such legislation in order to— 
"(1) adjust the benefits and the coverage available to persons 
affected by disasters; 
" (2) improve the execution of the program by simplifying and 
eliminating unnecessary administrative procedures; and 
"(3) prevent the misuse of benefits made available under the 
program.-' 
SEC. 6. Section 231 of the Disaster Relief Act of 1970 is amended 
by— 
(1) inserting'' (a)" after "SEC. 231."; and 
(2) adding at the end of such section the following new 
subsection: 
"(b) Loans to which this section applies may also be made for the 
purpose of providing small business concerns with working capital, 
the payment of operating expenses, and any purpose for which loans 
may be made under section 7(a) of the Small Business Act (15 U.S.C. 
636(a))." 
Approved August 16, 1972. 
Disaster relief 
legislation, Presi-
dential review. 
Report to con-
gressional com-
mittees. 
84 Stat. 1752. 
42 u s e 4451. 
72 Stat. 387; 
81 Stat. 268. 
Public Law 92-386 
JOINT RESOLUTION 
To authorize the printing and binding of a revised edition of Senate Procedure 
and providing the same shall be subject to copyright by the author. 
August 16, 1972 
[S. J. Res. 254] 
Resolved hy the Senate and House of Representatives 
of the United 
States of America in Congress assemhled^ That there shall be printed dure ^"^*^ Proce-
and bound for the use of the Senate one thousand five hundred copies 
Revised edition, 
of a revised edition of Senate Procedure (originally prepared by p^i^ti^g-
Charles L. Watkins and Floyd M. Riddick), to be prepared by Floyd 
M. Riddick, Parliamentarian of the United States Senate, to be 
printed under the supervision of the author and to be distributed to 
the Members of the Senate. 
SEC. 2. That notwithstanding any provision of the copyright laws 
and regulations with respect to publications in the public domain, such 
revised edition of Senate Procedure shall be subject to copyright by 
the author thereof. 
Approved August 16, 1972. 
Public Law 92-387 
AN ACT 
To amend the Federal Food, Drug, and Cosmetic Act to provide for a current 
listing of each drug manufactured, prepared, propagated, compounded, or 
processed by a registrant under that Act, and for other purposes. 
August 16, 1972 
[H. R. 9936] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ 
^'•"g Listing 
SECTION 1. This Act may be cited as the J'Drug Listing Act of 1972". ^"^ °^ ^^'^'^• 
SEC. 2. The Federal Government which is responsible for regulating