An Act to provide for improving the economy and living conditions in rural America
PL 92-419 (H.R.12931), enacted 08/30/1972

86 STAT. ] 
PUBLIC LAW 92-419-AUG. 30, 1972 
657 
the following: "Notwithstanding the provisions of subsection (a), 
any loss attributable to a disaster occurring in an area subse-
quently determined by the President of the United States to 
warrant assistance by the Federal Government under the Disaster 
Relief Act of 1970 may, at the election of the 
taxpayer, be 
deducted for the taxable year immediately preceding the taxable 
year in which the disaster occurred."; and 
(2) inserting before the period in the second sentence a comma 
and the following: "based on facts existing at the date the tax-
payer claims the loss", 
(b) Section 6405 of such Code (relating to reports of refunds and 
credits to the Joint Committee on Internal Revenue Taxation) is 
amended by adding at the end thereof the following new subsection: 
"(d) 
REFUNDS ATTRIBUTABLE TO CERTAIN DISASTER LOSSES.—If any 
refund or credit of income taxes is attributable to the taxpayer's elec-
tion under section 165 (h) to deduct a disaster loss for the taxable year 
immediately preceding the taxable year in which the disaster occurred, 
the Secretary or his delegate is authorized in his discretion to make 
the refund or credit, to the extent attributable to such election, without 
ard to the provisions of subsection (a) of this section. If such 
re 
refund or credit is made without regard to subsection (a), there shall 
thereafter be submitted to such Joint Committee a report containing 
the matter specified in subsection (a) as soon as the Secretary or his 
delegate shall determine the correct amount of the tax for the taxable 
year for which the refund or credit is made." 
(c) The amendment made by subsection (a) shall apply to disasters 
occurring after December 31, 1971, in taxable years ending after such 
date. The amendment made by subsection (b) shall apply with respect 
to refunds or credits made after July 1,1972. 
Approved August 29, 1972. 
84 Stat. 1744. 
42 u s e 4401 
note. 
68A Stat. 792. 
26 u s e 6405. 
Ante, 
p. 656. 
Report to con-
gressional com-
mittee. 
Effective dates. 
Public Law 92-419 
AN ACT 
I To provide for improving the economy and living conditions in rural America. 
August 30, 1972 
[H. R.12931] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "Rural Development Act of 1972". 
Rural Develop-
ment Act of 1972, 
TITLE I—AMENDMENTS TO T H E CONSOLIDATED FARM-
ERS HOME ADMINISTRATION ACT OF 1961 
' SEC. 101. SHORT TITLE.—Section 301(a) of the Consolidated Farm-
ers Home Administration Act of 1961 is amended to read as follows: 
"(a) This title may be cited as the 'Consolidated Farm and Rural 
Development Act'." 
SEC. 102. RURAL ENTERPRISE LOANS.—Section 304 of the Consoli-
dated Farmers Home Administration Act of 1961 is amended by— 
(1) inserting " ( a ) " before the first sentence and striking out 
" ( a ) " and " (b)" in the first sentence; and 
75 Stat. 307. 
7 u s e 1921 
note. 
75 Stat. 308; 
82 Stat. 770. 
7 u s e 1924. 
79 Stat. 931 
84 Stat. 1855 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
(2) adding at the end of section a new subsection as follows: 
"(b) Loans may also be made or insured under this subtitle to resi-
dents of rural areas without regard to the requirements of clauses (2) 
75 Stat. 307; 
and (3) of section 302 to acquire or establish in rural areas small busi-
7^usc ^922. 
^^^^ enterprises to provide such residents with essential income." 
SEC. 103. APPRAISALS.—Section 305 of the Consolidated Farmers 
7 use 192 5. 
Home Administration Act of 1961 is amended by striking out "nor-
mal" in the first and second sentences and striking out the last sentence. 
SEC. 104. ESSENTIAL RURAL COMMUNITY FACILITIES.—Section 306 
(a)(1) of the Consolidated Farmers Home Administration Act of 
1961 is amended (1) by inserting after "corporations not operated for 
V'uVc i"926. 
profit," the following: "Indian tribes on Federal and State reserva-
tions and other federally recognized Indian tribes,"; and (2) by 
striking out "and recreational developments" and inserting in lieu 
thereof "recreational developments, and essential community facilities 
. - 
, , ;;- 
including necessary related equipment". 
SEC. 105. GRANTS FOR WATER AND WASTE DISPOSAL SYSTEMS.— 
Section 306 (a) (2) of the Consolidated Farmers Home Administration 
82 Stat. 770. 
^^t of 1961 is amended by striking out "$100,000,000" and inserting in 
lieu thereof "$300,000,000". 
SEC. 106. PLANNING REQUIREMENTS.—The first sentence of section 
306(a) (3) of the Consolidated Farmers Home Administration Act of 
1961 is amended to read as follows: "No grant shall be made under 
paragraph (2) of this subsection in connection with any project unless 
the Secretary determines that the project (i) will serve a rural area 
;, j.j ,,,;, ,v;H 
which, if such project is carried out, is not likely to decline in popula-
tion below that for which the project was designed, (ii) is designed 
and constructed so that adequate capacity will or can be made available 
to serve the present population of the area to the extent feasible and 
to serve the reasonably foreseeable growth needs of the area, and (iii) 
is necessary for an orderly community development consistent with a 
• comprehensive community water, waste disposal, or other development 
plan of the rural area and not inconsistent with any planned develop-
ment provided in any State, multijurisdictional, county, or municipal 
plan approved by competent authority for the area in which the rural 
community is located, and the Secretary shall require the submission 
of all applications for financial assistance under this section to the 
multi 
jurisdictional substate area 
wide general purpose planning and 
development agency that has been officially designated as a clearing-
house agency under Office of Management and Budget Circular A-95 
and to the county or municipal government having jurisdiction over 
the area in which the proposed project is to be located for review^ and 
comment within a designated period of time not to exceed 30 days 
concerning among other considerations, the effect of the project upon 
the areawide goals and plans of such agency or government. No loan 
under this section shall be made that is inconsistent with any multi-
jurisdictional planning and development district areawide plan of such 
agency. The Secretary is authorized to reimburse such agency or gov-
ernment for the cost of making the required review." 
665. 
86 STAT. ] 
PUBLIC LAW 92-419-AUG. 30, 1972 
659 
SEC. 107. EXTENSION.—In the second sentence of section 306(a) (3) 
of the Consolidated Farmers Home Administration Act of 1961 strike o,^L^l^V7n^^' 
out "1971" and insert "1973". 
% use 1926. 
SEC. 108. WATER AND WASTE DISPOSAL PLANNING GRANTS.—Para-
jiraph (6) of section 306(a) of the Consolidated Farmers Home 
Administration Act of 1961 is amended by— 
(1) striking out "$15,000,000" and inserting in lieu thereof 
"$30,000,000"; 
(2) striking out "official"; and 
• 
(3) striking out "sewer" and inserting in lieu thereof "waste 
i 
disposal". 
• < . • 
SEC. 109. DEFINITIONS.—Section 306(a)(7) of the Consolidated 
'^" 
F'armers Home Administration Act of 1961 is amended to read as 
follows: 
"(7) As used in this title, the terms 'rural' and 'rural area' shall 
not include any area in any city or town which has a population in 
excess of ten thousand inhabitants, except that for purposes of loans 
and grants for private business enterprises under sections 304(b), 
Ante, p. 657. 
310B, and 312 (b), (c), and (d) the terms 'rural' and 'rural area' may ^/^°^^' PP* ^^3, 
include all territory of a State, the Commonw^ealth of Puerto Rico and 
the Virgin Islands, that is not within the outer boundary of any city 
having a population of fifty thousand or more and its immediately 
adjacent urbanized and urbanizing areas with a population density of 
more than one hundred persons per square mile, as determined by the 
Secretary of Agriculture according to the latest decennial census of the 
United States: Provided, 
That special consideration for such loans 
and grants shall be given to areas other than cities having a population 
of more than twenty-five thousand. 
SEC. 110. REPEAL or MAXIMUM SIZE LOAN.—Section 306(a) of the 
Consolidated Farmers Home Administration Act of 1961 is amended 
by striking out paragraph (5). 
SEC. 111. RURAL DEVELOPMENT PLANNING GRANTS.—Section 306(a) 
of the Consolidated Farmers Home Administration Act of 1961 is 
amended by adding at the end thereof a new paragraph as follows: 
"(11) The Secretary may make grants, not to exceed $10,000,000 
annually, to public bodies or such other agencies as he may select to 
prepare comprehensive plans for rural development or such aspects of 
rural development as he may specify." 
SEC. 
112. 
PRIORITY FOR CERTAIN WATER FACILITY AND WASTE 
DISPOSAL LOANS AND GRANTS.—Section 306(a) of the Consolidated 
Farmers Home Administration Act of 1961 is amended by adding at 
the end thereof the following: 
"(12) In the making of loans and grants for community waste dis-
posal and water facilities under paragraphs (1) and (2) of this subsec-
tion the Secretary shall accord highest priority to the application of 
any municipality or other public agency (including an Indian tribe on 
a Federal or State reservation or other federally recognized Indian 
tribal group) in a rural comaiunity having a population not in excess 
of five thousand five hundred and which, in the case of water facility 
75 Stat. 308. 
7 u s e 1927. 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
loans, has a community water supply system, where the Secretary 
determines that due to unanticipated diminution or deterioration of its 
water supply, immediate action is needed, or in the case of waste dis-
posal, has a community waste disposal system, where the Secretary 
determines that due to unanticipated occurrences the system is not ade-
quate to the needs of the community. The Secretary shall utilize the 
Soil Conservation Service in rendering technical assistance to appli-
cants under this paragraph to the extent he deems appropriate." 
SEC. 113. INTEREST RATES ON RURAL DEVELOPMENT LOANS.—Section 
307(a) of the Consolidated Farmers Home Administration Act of 
1961 is amended by inserting before the period at the end of the second 
sentence thereof the following: "; except that loans (other than loans 
to public bodies or nonprofit associations (including Indian tribes on 
Federal and State reservations and other federally recognized Indian 
tribal groups) for community facilities, or loans of a type authorized 
l)y section 306(a) (1) prior to its amendment by the Rural Develop-
658"'^' ^^* ^"' 
"lent Act of 1972) made or insured under section 304(b), 306(a) (1), 
Post, p. 663. 
"T- 310B shall— 
(1) when made other than as guaranteed loans, bear interest at 
a rate, prescribed by the Secretary, not less than a rate determined 
by the Secretary of the Treasury taking into consideration the 
current average market yield on outstanding marketable obliga-
tions of the United States comparable to the average maturities 
of such loans, adjusted in the judgment of the Secretary of the 
Treasury to provide for a rate comparable to the rates prevailing 
in the private market for similar loans and considering the Sec-
T'etary's insurance of the loans, plus an additional charge, pre-
scribed by the Secretary, to cover the Secretary's losses and cost of 
«i 
administration, which charge shall be deposited in the Rural 
m 
Development Insurance Fund: Provided, That the rate so pre-
scribed shall be adjusted to the nearest one-eighth of 1 per centum; 
and 
(2) when made as guaranteed loans, bear interest at such rate 
as may be agreed upon by the borrower and the lender". 
SEC. 114. ESCROW PAYMENTS.—Section 307(a) of the Consolidated 
^"P^°' 
Farmers Home Administration Act of 1961 is amended by inserting 
l)efore the period at the end the following:", and borrowers under this 
title shall prepay to the Secretary as escrow agent such taxes and 
insurance as he may require, on such terms and conditions as he may 
prescribe". 
SEC. 115. AGRICULTURAL CREDIT INSURANCE FUND AMENDMENTS.— 
(a) Section 309(f) of the Consolidated Farmers Home Administra-
82lta?V7f ^' 
tion Act of 1961 is amended by— 
7 use 1929. 
(1) changing "$100,000,000" to "$500,000,000" in paragraph 
(1); 
(2) changing paragraph (2) by— 
(A) striking out "the interest" and inserting in lieu thereof 
"amounts"; 
(B) changing "prepayments" to "payments" in all three 
places; and 
(C) inserting after "until due" the following: "or until 
the next agreed annual or semiannual remittance date". 
(3) striking out "section 335(a) in connection with insured 
loans." in paragraph (5) and inserting in lieu thereof "connec-
tion with insured loans, including the difference between interest 
payable by borrowers and interest to which insured lenders or 
insured holders are entitled vmder agreements with the Secretary 
included in contracts of insurance.". 
(4) inserting in paragraph (5) after "to pay" the following: 
"for contract services,". 
86 STAT. ] 
PUBLIC LAW 92-419~AUG. 30, 1972 
661 
(b) Section U)i) of sucli Act is anieiided by iiddijig at tJic e]id thereof 
^"'®' P- ^^°-
the following new subsections: 
"(g) (1) The assets and liabilities of, and authorizations applicable 
Transfer o
f 
to, the Farmers Home Administration direct loan account created by ^"""^s. 
section 338(c) and the Emergency Credit RevolviD#-ftind referred to 
7°u|*c*i988^' 
in section 326 are hereby transferred to the fundTand such account and 
7 use igee'. 
such revolving fund are hereby abolished. Such assets and their pro-
ceeds, including loans made out of the fund pursuant to this section, 
sliall be subject to the provisions of this section, section 308, the last 
^ use 1928. 
sentence of section 306(a)(1), and the last sentence of section 307. 1^2"^*^ ^^^^' 
"(2) From time to time, and at least at the close of each fiscal year, 
the Secretary shall pay from the fund into the Treasury as miscella-
neous receipts interest on the value as determined by the Secretary, with 
the approval of the Comptroller General, of the Government's equity 
transferred to the fund pursuant to the first sentence of this subsection 
plus the cumulative amount of appropriations made available after 
enactment of this provision as capital and for administration of the 
programs financed from the fund, less the average undisbursed cash 
balance in the fund during the year. The rate of such interest shall be 
determined by the Secretary of the Treasury, taking into consideration 
the current average yield on outstanding marketable obligations of the 
United States with remaining periods to maturity comparable to the 
average maturities of loans made or insured from the fund, adjusted 
to the nearest one-eighth of 1 per centum. Interest payments may be 
deferred with the approval of the Secretary of the Treasury, but any 
interest payments so deferred shall themselves bear interest. If at any 
time the Secretary determines that moneys in the fund exceed present 
and any reasonably prospective future requirements of the fund, such 
excess may be transferred to the general fund of the Treasury. 
"(h) The Secretary may provide financial assistance to borrowers loan^^'^^^^'^ 
for purposes provided in this title by guaranteeing loans made by any °^"^' 
Federal or State chartered bank, savings and loan association, coopera- 
' 
,. 
five lending agency, or other legally organized lending agenc}^" 
SEC. 116. KURAL DEVELOPMENT INSURANCE FUND.—The Consoli-
dated Farmers Home Administration Act of 1961 is amended by 
inserting the following new section after section 309: 
supra. 
"SEC. 309A. (a) There is hereby created the Rural Development 
Insurance Fund (hereinafter in this section referred to as the 'Insur-
ance Fund") which shall be used by the Secretary as a revolving fund 
for the discharge of the obligations of the Secretary under contracts 
guaranteeing or insuring rural development loans. For the purpose of 
"Rural develop-
this section 'rural development loans' shall be those provided for by sec- ""^"^ lo^ns." 
tions 304(b), 306(a) (1), 310B, and 312(b), except loans (^other than 
J^'^^' P- ^^-^ 
for water systems and waste disposal facilities) of a type authorized 665^^ ' ^^' 
bv section 306 (a)(1) prior to its amendment by the Rural Develop-
ment Act of 1972. 
"(b) The assets and liabilities of the Agricultural Credit Insurance fuJds"^^^'^ °^ 
Fund referred to in section 309 (a) applicable to loans for v/ater systems "7 use 1929. 
and waste disposal facilities under section 306(a) (1) are hereby trans-
ferred to the Insurance Fund. Such assets (including the proceeds 
thereof) and liabilities and rural development loans guaranteed or 
insured pursuant to this title shall be subject to the provisions of this 
section and section 308. 
"(c) Moneys in the Insurance Fund not needed for current opera-
tions shall be deposited in the Treasury of the United States to the 
credit of the Insurance Fund or invested in direct obligations of the 
United States or obligations guaranteed by the United States. The Sec- ;„^°';^l'„f"f,'''^^^' 
retary may purchase with money in the Insurance Fund any notes 
issued by the Secretary to the Secretary of the Treasury for the pur-
pose of obtaining money for the Insurance Fund. 
ing authority. 
662 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
authorfty.'^^"'"^ 
'' (d) The Secretary is authorized to make and issue notes to the Sec-
retary of the Treasury for the purpose of obtaining funds necessary 
for discharging obligations under this section and for making loans, 
advances, and authorized expenditures out of the Insurance Fund. 
Such notes shall be in such form and denominations and have such 
maturities and be subject to such terms and conditions as may be pre-
scribed by the Secretary with the approval of the Secretary of the 
Treasury. Such notes shall bear interest at a rate fixed by the Secre-
tary of the Treasury, taking into consideration the current average 
market yield of outstanding marketable obligations of the United 
States having maturities comparable to the average maturities of rural 
development loans made, guaranteed, or insured under this title. The 
Secretary of the Treasury is authorized and directed to purchase any 
notes of the Secretary issued hereunder, and, for that purpose, the Sec-
retary of the Treasury is authorized to use as a public debt transaction 
the proceeds from the sale of any securities issued under the Second 
85*stat^*5 ^^^' 
Liberty Bond Act, as amended, and the purposes for which such securi-
31 use 774. 
ties may be issued under such Act, as amended, are extended to include 
the purchase of notes issued by the Secretary hereunder. All redemp-
tions, purchases, and sales by the Secretary of the Treasury of such 
notes shall be treated as public debt transactions of the United States. 
" (e) Notes and security acquired by the Secretary in connection with 
rural development loans made, guaranteed, or insured under this title 
or transferred by subsection (b) of this section shall become a part of 
the Insurance Fund. Notes may be held in the Insurance Fund and col-
lected in accordance with their terms or may be sold by the Secretary 
with or without agreements for insurance thereof at the balance due 
thereon, or on such other basis as the Secretary may determine from 
time to time. All net proceeds from such collections, including sales of 
notes or property, shall be deposited in and become a part of the Insur-
ance Fund. 
"(f) The Secretary shall deposit in the Insurance Fund any charges 
collected for loan services provided by the Secretary as well as charges 
assessed for losses and costs of administration in connection with mak-
ing, guaranteeing, or insuring rural development loans under this title. 
"(g) The Secretary may utilize the Insurance Fund— 
"(1) to make rural development loans which could be insured 
under this title whenever he has a reasonable assurance that they 
can be sold without undue delay, and he may sell and insure such 
loans; 
"(2) to pay amounts to which the holder of insured notes is 
entitled on loans heretofore or hereafter insured accruing between 
the date of any payments by the borrower and the date of trans-
mittal of any such payments to the holder. In the discretion of the 
Secretary, payments other than final payments need not be 
remitted to the holder until due or until the next agreed annual or 
semiannual remittance date; 
" (8) to pay to the holder of insured notes any defaulted install-
ment, or upon assignment of the note to the Secretary at the Secre-
tary's request, the entire balance due on the loan; 
"(4) to purchase notes in accordance with contracts of insur-
ance heretofore or hereafter entered into b;v the Secretary; 
" (5) to make payments in compliance with the Secretary's obli-
gations under contracts of guarantee entered into by him ; 
"(6) to pay taxes, insurance, prior liens, expenses necessary to 
make fiscal adjustments in connection with the application and 
transmittal of collections or necessary to obtain credit reports on 
applicants or borrowers, expenses for necessary services, includ-
ing construction inspections, commercial appraisals, loan servic-
ing, consulting business advisory or other commercial 
and 
Loan service 
charges. 
Use of funds. 
86 
STAT.] 
PUBLIC LAW 92-419-AUG. 30, 1972 
663 
technical services, and other program services, and other expenses 
and advances authorized in section 335(a) of this title in connec-
tion with insured loans. Such items may be paid in connection 
with guaranteed loans after or in connection with acquisition by 
the Secretary of such loans or security therefor after default, to an 
extent determined by the Secretary to be necessary to protect the 
interest of the Government, or in connection with grants and any 
other activity authorized in this title; 
"(7) to pay the difference between interest payments by bor-
rowers and interest to which holders of insured notes are entitled 
under contracts of insurance heretofore or hereafter entered into 
by the Secretary; and 
"(8) to pay the Secretary's costs of administration of the rural 
development loan program, including costs of the Secretary inci-
dental to guaranteeing rural development loans under this title. 
•'(h) When any loan is sold out of the Insurance Fund as an insured 
loan, the interest or other income thereon paid to an insured holder 
shall be included in gross income for purposes of chapter 1 of the 
Internal Revenue Code of 1954," 
SEC. 
117. 
INSURED WATERSHED AND RESOURCE CONSERVATION AND 
DEVELOPMENT LOANS.—Subtitle A of the Consolidated Farmers Home 
Administration Act of 1961 is amended by adding at the end a new 
section as follows: 
"SEC. 310A. Loans meeting the requirements of the Watershed Pro-
tection and Flood Prevention Act or title I I I of the Bankhead-Jones 
Farm Tenant Act may be insured, or made to be sold and insured, in 
accordance with and subject to sections 308 and 309, the last sentence 
of section 306(a) (1), and the last sentence of section 307 of this title." 
SEC. 118. RURAL INDUSTRL'VLIZATION ASSISTANCE.— (a) Subtitle A of 
the Consolidated Farmers Home Administration Act of 1961 is 
amended by adding at the end thereof, after section 310A as added by 
this Act, a new section as follows: 
"SEC. 310B. (a) The Secretary may also make and insure loans to 
public, private, or cooperative organizations organized for profit or 
nonprofit, to Indian tribes on Federal and State reservations or other 
federally recognized Indian tribal groups, or to individuals for the 
purpose of improving, developing, or financing business, industry, and 
employment and improving the economic and environmental climate 
in rural communities, including pollution abatement and control. Such 
loans, when originated, held, and serviced by other lenders, may be 
guaranteed by the Secretary under this section without regard to sub-
sections (a) and (c) of section 333. 
"(b) The Secretary may make grants, not to exceed $50,000,000 
annually, to eligible applicants under this section for pollution abate-
ment and control projects in rural areas. No such grant shall exceed 
50 per centum of the development cost of such a project. 
"(c) The Secretary may also make grants, not to exceed $50,000,000 
annually, to public bodies for measures designed to facilitate develop-
ment of private business enterprises, including the development, con-
struction or acquisition of land, buildings, plants, equipment, access 
streets and roads, parking areas, utility extensions, necessary water 
supply and waste disposal facilities, refinancing, services and fees. 
"(d) The Secretary may participate in joint financing to facilitate 
development of private business enterprises in rural areas with the 
Economic Development Administration, the Small Business Adminis-
tration, and the Department of Housing and Urban Development and 
other Federal and State agencies and with private and quasi-public 
financial institutions, through joint loans to applicants eligible under 
subsection (a) for the purpose of improving, developing, or financing 
75 Stat. 315. 
7 u s e 1985. 
68A Stat. 5. 
26 u s e 1. 
75 Stat. 307. 
7 u s e 1922. 
16 u s e 1001 
note. 
7 u s e 1010. 
7 use 1928, 
1929, 
1926, 1927. 
Post, p. 666. 
Pollution abate-
ment projects, 
grants. 
Private business 
enterprises, de-
velopment grants. 
82-081 O- 73 -45 
664 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
Restrictions. 
Ante, pp. 657, 
663; Post, p. 665. 
75 Stat. 314. 
7 u s e 1983. 
7 u s e 1922. 
79 Stat. 498. 
42 u s e 1487. 
48 Stat. 
12 u s e 
63 Stat. 
433. 
42 u s e 
1472. 
42 u s e 
1246. 
1701. 
432, 
1471, 
1471. 
business, industry, and employment and improving the economic and 
environmental climate in rural areas or through joint grants to appli-
cants eligible under subsection (c) for such purposes, including in 
the case of loans or grants the development, construction, or acqui-
sition of land, buildings, plants, equipment, access streets and roads, 
parking areas, utility extensions, necessary water supply and waste 
disposal facilities, renning, service and fees. 
(1) No financial or other assistance shall be extended under any 
provision of sections 30J:(b), 31()B, and 312(b) that is calculated to or 
is likely to result in the transfer from one area to another of any 
employment or business activity provided by operations of the appli-
cant, but this limitation shall not be construed to prohibit assistance 
for the expansion of an existing business entity through the establish-
ment of a new branch, affiliate, or subsidiary of such entity if the estab-
lishment of such branch, affiliate, or subsidiary will not result in an 
increase in unemployment in the area of original location or in any 
other area where such entity conducts business operations unless there 
is reason to believe that such branch, affiliate, or subsidiary is being 
established with the intention of closing down the operations of the 
existing business entity in the area of its original locaticm or in any 
other area where it conducts such operations. 
(2) No financial or other assistance shal I be extended under any pro-
vision of sections 304(b), 310B, and 312(b) which is calculated to or 
likely to result in an increase in the production of goods, materials, or 
commodities, or the availability of services or facilities in the area, 
when there is not sufficient demand for such goods, materials, commodi-
ties, services, or facilities, to employ the efficient capacity of existing 
competitive commercial or industrial enterprises, unless such financial 
or other assistance will not have an adverse effect upon existing com-
petitive enterprises in the area. 
(3) No financial or other assistance, shall be extended under any 
provision of sections 304(b), 3101^, and 312(b) if the Secretary of 
Ijabor certifies Avithin 60 days after the matter has been submitted to 
him by the Secretary of Agriculture that the provisions of paragraph 
(1) and (2) of this subsection have not been complied with. The Secre-
tary of Labor shall, in cooperation with the Seci-etary of Agriculture, 
develop a system of certification which will insure the expeditious 
processing of requests for assistance under this section." 
(b) Section 333 of the Consolidated Farmors Home Administration 
Act of 1901 is amended by inserting "310B," in paragraph (b) aftei-
•'306,". 
SEC. 119. GUARANTEED RITRAI. HOITSTNG LOANS.—Subtitle A of the 
Consolidated Farmers Home Administration Act of 1961 is amended 
by adding at the end thereof a new section as follows: 
"SEC. 310C. (a) Rural Housing Loans which (1) are guaranteed by 
the Secretary under section 517(a) (2) of the Housing Act of 1949, (2) 
are made by other lenders approved by the Secretary to provide dwell-
ings in rural areas for the applicants' own use, and (3) bear interest 
and other charges at rates not above the maximum rates prescribed by 
the Secretary of Housing and Urban Development for loans made by 
private lenders for similar purposes and guaranteed by the Secretary 
of Housing and L^rban Development under the National Housing Act 
or superseding legislation shall not be subject to sections 501(c) and 
502(b) (3) of the Housing Act of 1949." 
"(b) For the purposes of title V of the Housing Act of 1949, as 
amended, a guarantee of payment given under the color of law by the 
Department of Hawaiian Home Lands (or its successor in function) 
shall be found by the Secretary reasonably to assure repayment of any 
indebtedness so guaranteed." 
.,-..,,.,... 
86 STAT.] 
PUBLIC LAW 92-419-AUG. 30, 1972 
665 
SEC. 120. YOUNG FARMERS' LOANS.—(a) Section 311 of the Consoli-
dated Farmers Home Administration Act of 1961 is amended by— 
(1) inserting " (a)" before the first word; and 
(2) adding at the end of the section a new subsection as follows: 
"(b) (1) Loans may also be made under this subtitle without regard 
to the requirements of clauses (2) and (3) of subsection (a) to youth? 
who are rural residents to enable them to operate enterprises in con-
nection with their participation in 4-H Clubs, Future Farmers of 
America, and similar organizations and for the purposes specified in 
section 312. 
''(2) A person receiving a loan under this subsection who executes a 
promissory note therefor shall thereby incur full personal liability for 
tbe indebtedness evidenced by such note in accordance with its terms 
free of any disability of minority. 
"(3) For loans under this subsection the Secretary may accept the 
personal liability of a cosigner of the promissory note in addition to 
the borrowers' personal liability." 
(b) Section 312 of the Consolidated Farmers Home Administration 
Act of 1961 is amended by inserting "(a)'' after "311". 
SEC. 121. EURAL ENTERPRISE OPERATING LOANS.—Section 312 of 
the Consolidated Farmers Home Administration Act of 1961, as 
amended by this title, is amended by— 
(1) inserting " (a)" before the first word; and 
(2) further amending subsection (a) (as so designated by par-
agraph (1)) by striking out "and (9) for loan closing costs." and 
by inserting in lieu thereof the following: "(9) loan closing costs, 
and (10) for assisting farmers or ranchers in effecting additions 
to or alterations in the equipment, facilities, or methods of opera-
tion of their farms or ranches in order to comply with the appli-
cable standards promulgated pursuant to section 6 of the 
Occupational Safety and Health Act of 1970 or standards adopted 
by a State pursuant to a plan approved under section 18 of the 
Occupational Safety and Health Act of 1970, if the Secretary 
determines that any such farmer or rancher is likely to suffer sub-
stantial economic injury due to such compliance without assistance 
under this paragraph." 
(3) adding at the end of the section new subsections as follows: 
" (b) Leans may also be made under this subtitle to residents of rural 
areas without regard to the requirements of clauses (2) and (3) of 
section 311(a) to operate in rural areas small business enterprises to 
provide such residents with essential income. 
"(c) Loans may also be made to eligible applicants under this sub-
title for pollution abatement and control project^ in rural areas. 
" (d) The Secretary may make grants, not to exceed $25,000,000 annu-
ally, to eligible applicants under this subtitle for pollution abatement 
and control projects in rural areas. No such grant shall exceed 50 pei-
centum of the development cost of such a project." 
SEC. 122. MAXIMUM SIZE.—Section 313 of the Consolidated Farmers 
Home Administration Act of 1961 is amended by changing "$35,000" 
to "$50,000". 
SEC. 123. INSURED OPERATING LOANS.—Subtitle B of the Consoli-
dated Farmers Home Administration Act of 1961 is amended by adding 
at the end thereof a new section as follows: 
"SEC. 317. Loans meeting the requirements of this subtitle (except 
section 312(b)) may be insured, or made to be sold and insured, m 
accordance with and subject to sections 308 and 309 and the last 
sentence of section 307 of this title." 
SEC. 124. AMENDMENTS TO SECTION 331.—Section 331 of the Con-
solidated Farmers Home Administration Act of 1961, is amended— 
(1) by inserting before the semicolon, in paragraph (a), thf 
75 Stat. 310. 
7 use 1941. 
82 Stat. 771. 
7 use 1942. 
Liability. 
84 Stat. 1593. 
29 use 655. 
29 use 667. 
Supra. 
Pollution abate-
ment. 
75 Stat. 310. 
7 use 1943. 
7 use 1941. 
Supra. 
7 use 1928. 
Ante, pp. 660, 
661. 
7 use 1927. 
7 use 1981. 
666 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
Report to 
President, trans-
mittal to Con-
gress. 
Fidelity bonds. 
Ante, 
p. 202. 
Interest pay-
ments. 
75 Stat. 314. 
7 u s e 1983. 
7 u s e 1961. 
7 u s e 1985. 
Definitions. 
76 Stat. 632; 
80 Stat. 809. 
7 u s e 1991. 
75 Stat. 308. 
7 u s e 1927. 
7 u s e 1921 
note. 
following: ". and until January 1, 1975, make contracts for serv-
ices incident to making, insuring, collecting, and servicing loans 
and propei'ty as determined by the Secretary to be necessary foi" 
carrying out the purposes of this title; (and the Secretary shall 
prior to June 80, 1974, report to the Congress through the Presi-
dent on the experience in using such contracts, together with 
recommendations for- such legislation as he may see fit)*'; and 
(2) by changing the period at the end of any lettered paragraph 
thereof to a semicolon and adding at the end of such section the 
following additional paragraphs: 
" (g) Obtain fidelity bonds protecting the Govei-nment against fraud 
and dishonesty of officers and employees of the Farmers Home Admin-
istration in lieu of faithful performance of duties bonds under section 
14, title 6, United States Code, and regulations issued pursuant thereto, 
but otherwise in accordance with the pi'ovisions thereof; 
"(h) Not require borrowers to pay interest accrued aftei* Decem-
ber 81,1972, on interest which is not more than 90 days.overdue on any 
loan held or insured by the Farmers Home Administration; 
"'(i) Consent to the transfer of property securing any loan or 
financed by any loan or grant made, insured, or held by the Secretary 
under this title, or the provisions of any other law administered by the 
F'armers Home Administration, upon such terms as he deems neces-
sary to carry out the purpose of the loan or grant or to protect the 
financial interest of the Government."' 
SEC. 125. CREDIT ELSEWHERE DETERMINATION.—Paragraph (a) 
of 
section 888 is amended by inserting after ""in writing'' the following: 
", and the Secretary shall determine,". 
SEC. 126. REPEAL OF COUNTY COMMITTEE APPROVAL REQUIREMENT 
F
O
R Associ.vTioN AND DISTRICT LoANS.—Sectiou 388(b) of the Con-
solidated Farmers Home Administration Act of 1961 is amended by 
striking out the words "said sections'' and inserting "section 
821(b)(2)". 
SEC. 127. DISPOSITION or REAL PROPERTY.—Section 385(c) of 
the 
Consolidated Farmers Home Administration Act of 1961 is amended 
by— 
(1) striking out "subtitle A" in the first sentence and inserting 
in lieu thereof "the provisions of any law administered by the 
Farmers Home Administration"; 
(2) striking out "the provisions of subtitle A" in the second 
sentence and inserting in lieu thereof "such provisions"; 
(8) striking out in the fourth sentence "of at least 20 per 
centum" and "not more than five annual"; and 
(4) adding at the end of the fourth sentence before the period 
the following: ", but not in any event at rates and terms more 
favorable than those legally permissible for eligible borrowers". 
SEC. 128. (a) GUARANTEE OF LOANS.—Section 348 of the Consoli-
dated Farmers Home Administration Act of 1961 is amended by 
inserting at the end thereof before the period the following: ", and 
(4) the word 'insure' as used in this title includes guarantee, which 
means to guarantee the payment of a loan originated, held, and serv-
iced by a private financial agency or other lender approved by the 
Secretary, and (5) the term 'contract of insurance' includes a contract 
of guarantee". 
(b) Section 807(b) of the Consolidated Farmers Home Administra-
tion Act of 1961 is amended by changing "shall" to "may" in the 
second sentence. 
SEC. 129. ORDER OF PREFERENCE, EXTENT OF GUARANTY.—The Con-
solidated Farmers Home Administration Act of 1961 is amended by 
adding at the end thereof the following new section: 
86 STAT. ] 
PUBLIC LAW 92-419-AUG. 30, 1972 
667 
"SEC. 344. No loan (other than one to a public body or nonprofit 
Loan umita-
association (including Indian tribes on Federal and State reservations ''°"^-
or other federally recognized Indian tribal groups) for community 
facilities or one of a type authorized by section 306(a) (1) prior to 
its amendment by the Kural Development Act of 1972) shall be made g/stat^^'s^s^s^' 
by the Secretary either for sale as an insured loan or otherwise under 
7 use 1926. 
section 304(b), 306(a) (1), 310B, 312(b), or 312(c) unless the Secre- ^ ^nte. pp. 657, 
tary shall have determined that no other lender is willing to make 
such loan and assume 10 per centum of any loss sustained thereon. No 
contract guaranteeing any such loan by such other lender shall require 
the Secretary to participate in more than 90 per centum of any loss 
sustained thereon.'-
TITLE II—AMENDMENTS TO THE WATERSHED PROTEC-
TION AND FLOOD PREVENTION ACT, AS AMENDED 
SEC. 201. AMENDMENTS TO PUBLIC LAW 83-566.—The Watershed 
Protection and Flood Prevention Act (68 Stat. 666), as amended, is ^^^^ ^^'^ ^°°^ 
amended as follows: 
(a) Section 1 is amended by striking out the words "the purpose of 
preventing such damages and of furthering the conservation, develop-
ment, utilization, and disposal of water, and thereby of preserving 
and protecting the Nation's land and water resources" and substituting 
therefor the words "the purpose of preventing such damages, of 
furthering the conservation, development, utilization, and disposal 
of water, and the conservation and utilization of land and thereby 
of preserving, protecting, and improving the Nation's land and water 
resources and the quality of the environment." 
(b) Section 2 is amended by substituting a comma for the word 
^o stat. loss. 
"or" after clause (1) and adding after the phrase "(2) the conserva-
tion, development, utilization, and disposal of water" a comma and 
the following: "or 
" (3) the conservation and proper utilization of land". 
(c) Section 3 is amended by changing the period at the end of 
paragraph (5) to a semicolon and adding the following: 
"(6) to enter into agreements with landowners, operators, and occu- 
conservation 
piers, individually or collectively, based on conservation plans of such ferm^agreements. 
landowners, operators, and occupiers which are developed in coopera-
tion with and approved by the soil and water conservation district in 
which the land described in the agreement is situated, to be carried out 
on such land during a period of not to exceed ten years, providing for 
changes in cropping systems and land uses and for the installation of 
soil and water conservation practices and measures needed to conserve 
and develop the soil, water, woodland, wildlife, and recreation 
resources 01 lands within the area included in plans for works of 
improvement, as provided for in such plans, including watershed or 
subwatershed work plans in connection with the eleven watershed 
improvement programs authorized by section 13 of the Act of Decem-
ber 22, 1944 (58 Stat. 887), as amended and supplemented. Applica- 
Applications. 
tions for assistance in developing such conservation plans shall be 
made in writing to the soil and water conservation district involved, 
and the proposed agreement shall be reviewed by such district. In 
Federal cost 
return for such agreements by landowners, operators, and occupier's the ^'^^""s-
Secretary shall agree to share the costs of carrying out those practices 
and measures set forth in the agreement for which he determines that 
cost sharing is appropriate and in the public interest. The portion of 
such costs, including labor, to be shared shall be that part which the 
Secretary determines is appropriate and in the public interest for the 
carrying out of the practices and measures set forth in the agreement. 
16 
use 
1002. 
1
6 
use 
1003. 
668 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 SxAt. 
74 Stat. 254; 
76 Stat. 608. 
16 u s e 1004. 
Water quality 
management. 
Water storage, 
cost sharing. 
70 Stat. 1090; 
74 Stat. 131. 
16 u s e 1006a. 
Limitation. 
Reimbursement. 
except that the Federal assistance shall not exceed the rate of assist-
ance for similar practices and measures under existing national pro-
grams. The Secretary may terminate any agreement with a landowner, 
operator, or occupier by mutual agreement if the Secretary determines 
that such termination would be in the public interest, and may agree 
to such modifications of agreements, previously entered into hereunder, 
as he deems desirable to carry out the purposes of this paragraph or to 
facilitate the practical administration of the agreements provided for 
herein. Notwithstanding any other provision of law. the Secretary, to 
the extent he deems it desirable to carry out the purposes of this para-
graph, may provide in any agreement hereunder for (1) preservation 
for a period not to exceed the period covered by the agreement and an 
equal period thereafter of the cropland, crop acreage, and allotment 
history applicable to land covered by the agreement for the purpose of 
any Federal program under which such history is used as a basis for 
an allotment or other limitation on the production of any crop; or 
(2) surrender of any such history and allotments." 
(d) Paragraph (1) of section 4 is amended by inserting after "with-
out cost to the Federal Government" the words "from funds appro-
priated for the purposes of this act". 
(e) Clause A of paragraph (2) of section 4 is amended by striking 
all words after "fish and wildlife" and substituting therefor the words 
"development, recreational development, ground water recharge, water 
<|uality management, or the conservation and proper utilization of 
land: Provided, That works of improvement for water quality man-
agement shall consist primarily of water storage capacity in reservoirs 
for regulation of streamflow, except that any such storage and water 
releases shall not be provided as a substitute for adequate treatment 
or other methods of controlling waste at the source, and shall be con-
sistent with standards and regulations adopted by the Water Resources 
Council on Federal cost sharing for water quality management, and". 
(f) All that part of clause (B) of paragraph (2) of section 4 which 
follows the word ^''Provided,^- where it first appears therein is amended 
to read as follows: "That, in addition to and without limitation on the 
authority of the Secretary to make loans or advancements under sec-
tion 8, the Secretary may pay for any storage of water for present or 
anticipated future demands or needs for municipal or industrial water 
included in any reservoir structure constructed or modified under the 
provisions of this Act as hereinafter provided: Provided further^ That 
the cost of water storage to meet future demands ma^ not exceed 30 
per centum of the total estimated cost of such reservoir structure and 
the local organization shall give reasonable assurances, and there is 
evidence, that such demands for the use of such storage will be made 
within a period of time which will permit repayment within the life of 
the reservoir structure of the cost of such storage: Provided 
further, 
That the Secretary shall determine prior to initiation of construction 
or modification of any reservoir structure including such water supply 
storage that there are adequate assurances by the local organization or 
by an agency of the State having authority to give such assurances, 
that the Secretary will be reimbursed the cost of water supply storage 
for anticipated future demands, and that the local organization will 
pay not less than 50 per centum of the cost of storage for present water 
supply demands: And provided further, That the cost to be borne by 
the local organization for anticipated future demands may be repaid 
within the life of the reservoir structure but in no event to exceed fifty 
years after the reservoir structure is first used for the storage of water 
^or anticipated future water supply demands, except that (1) no reim-
bursement of the cost of such water supply storage for anticipated 
future demands need be made until such supply is first used, and (2) 
no interest shall be charged on the cost of such water-supply storage 
86 
STAT.] 
PUBLIC LAW 92-419-AUG. 30, 1972 
669 
70 Stat. 1090; 
74 Stat. 131. 
16 use iP06a. 
Plans, submittal 
to Federal agen-
cies, President 
for anticipated future demands until such supply is first used, but in 
no case shall the interest-free period exceed ten years. The interest rate 
used for purposes of computing the interest on the unpaid balance 
shall be determined in accordance with the provisions of section 8." 
(g) Subsection (4) of section 5 is amended to read as follows: "(4) 
Any plans for works of improvement involving an estimated Federal 
contribution to construction costs in excess of $250,000 or including 
any structure having a total capacity in excess of twenty-five hundred and congress. 
acre-feet (a) which includes works of improvement for reclamation or 
H ^g^- ^^^^ 
irrigation, or which affects public or other lands or wildlife under the 
jurisdiction of the Secretary of the Interior, (b) which includes Fed-
eral assistance for goodwater detention structures, (c) which includes 
features which may affect the public health, or (d) which includes 
measures for control or abatement of water pollution, shall be sub-
mitted to the Secretary of the Interior, the Secretary of the Army, the 
Secretary of Health, Education, and Welfare, or the Administrator 
of the Environmental Protection Agency, respectively, for his views 
and recommendations at least thirty days prior to transmission of tlie 
plan to the Congress through the President. The views and recommen-
dations of the Secretary of the Interior, the Secretary of the Army, the 
Secretary of Health, Education, and Welfare, and the Administrator 
of the Environmental Protection Agency, if received by the Secretary 
prior to the expiration of the above thirty-day period, shall accompany 
the plan transmitted by tlie Secretary to the Congress through the 
President." 
TITLE III—AMENDMENTS TO THE 
HANKHEAI)-,I()NES 
FARM TENANT A(^T, AS A : M E N I ) E I ) 
SKC. 801. 
BANKIIKAD-JONKS FARM TP:XAXT ACT AMENDMENTS.-^ 
Section 32(e) of title I I I of the Bankhead-Jones Farm Tenant Act, as 
amended (7 t^.S.C. 1011), is amended by adding at the end tliereof the 
following: 
"The Secretary shall also be authorized in providing assistance for 
carrying out plans developed under this title: 
"(1) To provide technical and other assistance, and to pay for any 
storage of water for present or anticipated future demands or needs 
for rural community water supply included in any reservoir structure 
constructed or modified pursuant to such plans: Provided, That the 
cost of water storage to meet future demands may not exceed 30 per 
centum of the total estimated cost of such reservoir structure and the 
public agency or local nonprofit organization shall give reasonable 
assurances, and there is evidence, that such demands for the use of 
.such storage will be made within a period of time which will permit 
repayment of the cost of such water supply storage within the life of 
the reservoir structure: Provided 
further, 
That the public agency 
or local nonprofit organization prior to initiation or construction or 
modification of any reservoir structure including water supply storage, 
make provision satisfactory to the Secretary to pay for not less than 
oO per centum of the cost of storage for present water supply demands, 
and all of the cost of storage for anticipated future demands: Avd pro-
vided further. That the cost to be borne by the public agency or local 
nonprofit organization for anticipated future demands may be repaid 
within the life of the reservoir structure but in no event to exceed 
fifty years after the reservoir structure is first used for the storage of 
water for anticipated future water supply demands except that (1) 
no payment on account of such cost need be made until such supply is 
first used, and (2) no interest shall be charged on such cost until such 
supply is first used, but in no case shall the interest-free period exceed 
ten years. The interest rate used for purposes of computing tlie interest 
76 Stat. 607; 
84 Stat. 439, 
Water storage, 
Federal assist-
Litnitation. 
670 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
<:)ii the unpaid balance shall be the average rate, as determined bj the 
Secretary of the Treasury, payable by the Treasury upon its market-
able public oblioations outstanding at the beginning of the fiscal year 
in which the advancement for such water supply is first made, which 
are neither due nor callable for redemption for fifteen years from date 
of issue; 
Other Federal 
"(2) To provide, for the benefit of rural communities, technical and 
other assistance and such proportionate share of the costs of installing 
measures and facilities for water quality management, for the control 
and abatement of agriculture-related poUuticm, for the disposal of solid 
wastes, and foi- the storage of water in i-eservoirs, farm ponds, or other 
impoundments, togethei- with necessary water withdrawal appurte-
nances, for rural fire protection, as is determined by the Secr-etar-y to be 
equitable iu consideration of national needs and assistance authorized 
for similai- purposes undei' other Federal programs." 
SEC. H()2. SOIL. WATER AXU RELATED RESOURCE DATA.—In recog-
nition of the increasing need for soil, water', and related resource data 
for land conservation, use, and development, for guidance of commu-
nity development for a balanced rural-urban growth, for identification 
of prime agriculture producing areas that should be protected, and 
for use in protecting the quality of the environment, the Secretary of 
Agriculture is directed to carry out a land inventory and monitoring 
])i'ogram to include, but not be limited to. studies and surveys of ero-
sion and sediment damages, flood plain identification and utilization, 
land use changes and tr-ends, and degradation of the environment 
^^po""'- 
resulting from impi'opei- use of soil, water, and r-elated resources. The 
Secretary shall issue at not less than five-year intervals a land inven-
tory report reflecting soil, water, and related I'esource conditions. 
TITLE IV—RURAL COMMUNTrY FIRE PROTECTION 
SEC. -tOl. AVILDFIRE PROTECTION ASSISTANCE.—In order to shield 
human and natural resources, financial investments, and environmental 
(juality from losses due to wildfires in unprotected or poorly protected 
rural ai'eas there is a need to strengthen and synergize Federal, State, 
and local efforts to establish an adequate protection capability wher-
ever the lives and property of Americans are endangered by wildfire 
in rural communities and areas. The Congress hereby finds that inade-
(|uate fire protection and the resultant threat of substantial losses 
of life and property is a significant deterrent to the investment of the 
laboi' and capital needed to help revitalize rural America, and thai 
well-organized, equipped, and trained firefighting forces are needed in 
many i-ural areas to encourage and safeguard public and private 
investments in the improvement and development of areas of rural 
America where organized protection against losses from wildfire is 
lacking or inadequate. To this end, the Secretary of Agriculture is 
authorized and directed to provide financial, technical, and other 
assistance to State foresters or other appropriate officials of the several 
States in cooperative efforts to organize, train, and equip local forces, 
including those of Indian tribes on Federal and State reservations 
or other federally recognized Indian tribal groups to prevent, control, 
and suppress wildfires threatening human life, livestock, wildlife, 
crops, pastures, orchards, rangeland, woodland, farmsteads, or other 
improvements, and other values in rural areas as defined in section 
Ante. p. 659. 
:}06(a) (7) of the Consolidated Farm and Rural Development Act. 
Cooperative 
gj-Q^ 402. ]MATCiriNG.—The Secretary shall carry out this title in 
sfate^^fficlaTs. 
accordauce with cooperativ^e agreements, made with appropriate State 
officials, vv'hich include such terms and conditions as the Secretary 
deems necessary to achieve the purposes of this title. No such agree-
ment shall provide for financial assistance by the Secretary under 
86 STAT. ] 
PUBLIC LAW 92-419-AUG. 30, 1972 
671 
this title ill any State during any fiscal year in excess of 5(J per centum 
of the total budgeted expenditures or the actual expenditures, which-
ever is less, of the undertaking of such agreement for such year, 
including any expenditures of local public and private nonprofit orga-
nizations, including Indian tribal groups, participating in the activi-
ties covered by the agreement. Payments by the Secretary under any 
such agreement may be made on the certificate of the appropriate 
State official that the expenditures provided for under such agreement 
have been made. 
SEC. 403. REPORT.—The Secretary of Agriculture shall su})mit to the p^J^fj'J''° 
President within two years after the date of enactment of this title a mitta'i to con^-"^" 
written report detailing the contribution of the rural fire protection gress. 
program toward achieving the purposes of this title. The Secretary 
shall also include in such report such recommendations regarding the 
rural fire protection program as he deems appropriate. The President 
shall transmit the report to the Congress for review and appropriate 
action. 
SEC. 404. AppiiorRiATiONs.—There is authorized to be appropriated 
to carry out the provisions of this title $7,000,000 for each of the fiscal 
years ending June 30, 1973, June 30, 1974, and June 30, 1975. 
TITLE V—RURAL DEVELOPMENT AND SMALL F A R : \ I 
RESEARCH AND EDUCATION 
SEC. 501. PURPOSES.—The purpose of this title is to encourage and 
foster a balanced national development that provides opportunities 
for increased numbers of Americans to work and enjoy a high quality 
of life dispersed throughout our Nation by providing the essential 
knowledge necessary for successful programs of rural development. 
It is further the purpose of this title— 
(a) to provide multistate regional agencies. States, counties, 
cities, multicounty planning and development of districts, busi-
nesses, industries, organizations, Indian tribes on Federal and 
State reservations or other federally recognized Indian tribal 
groups, and others involved with public services and investments 
in rural areas or that provide or may provide employment in 
these areas the best available scientific, technical, economic, orga-
nizational, environmental, and management information and 
knowledge useful to them, and to assist and encourage them in 
the interpretation and application of this information to practical 
problems and needs in rural development; 
(b) to provide research and investigations in all fields that have 
as their purpose the development of useful knowledge and infor-
mation to assist those planning, carrying out, managing, or invest-
ing in facilities, services, businesses, or other enterprises, public 
and private, that may contribute to rural development; 
(c) to enhance the capabilities of colleges and universities to 
perform the vital public service roles of research, transfei-, 
and practical application of knowledge in support of rural 
development ; 
(d) to expand research on innovative approaches to small farm 
management and technology and extend training and technical 
assistance to small farmers so that they may fully utilize the best 
available knoAvledge on sound economic approaches to small farm 
operations. 
SEC. 502. PROGRAMS AUTHORIZED.—The Secretary of Agriculture 
(hereafter referred to as the "Secretarj^") is directed and authorized to 
conduct in cooperation and in coordination with colleges and univer-
sities the following programs to carry out the purposes of this title. 
672 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
(a) RuKAL DKNKi.oi'MEXT EXTENSION PROGRAMS.—Ruial develop-
ijient extension programs shall consist of the collection, interpretation, 
and dissemination of useful information and knowledge from research 
and other sources to units of multistate regional agencies, State, 
county, municipal, and other units of government, multicounty plan-
ning and development districts, organizations of citizens contributing 
to rural development, business, Indian tribes on Federal or State res-
ervations or other federally recognized Indian tribal groups, or indus-
tries that employ or may employ people in rural areas. These programs 
also shall include technical services and educational activity, including 
instruction for persons not enrolled as students in colleges or univer-
sities, to facilitate and encourage the use and practical application of 
this information. These programs also may include feasibility studies 
and planning assistance. 
(b) RURAL DEVELOPMENT RESEARCH.—Rural development research 
shall consist of research, investigations, and basic feasibility studies 
in any field or discipline which may develop principles, facts, scientific 
and technical knowledge, new technology, and other information that 
may be useful to agencies of Federal, State, and local government, 
industries in rural areas, Indian tribes on Federal and State reserva-
tions or other federally recognized Indian tribal groups, and other 
organizations involved in rural development programs and activities 
in planning and carrying out such programs and activities or other-
wise be practical and useful in achieving increased rural development. 
(c) 
SMALL 
FARM 
EXTENSION, 
RESEARCH, 
AND DEVELOPMENT 
l^ROGRAMS.—Small farm extension and research and development 
programs shall consist of extension and research programs with respect 
to new approaches for small farms in management, agricultural pro-
duction techniques, farm machinery technology, new products, coop-
erative agricultural marketing, and distribution suitable to the 
economic development of family size farm operations. 
SEC. 503. APPROPRIATION AND ALLOCATION OF FUNDS.— (a) There is 
hereby authorized to be appropriated to carry out the purposes of this 
title not to exceed $10,000,000 for the fiscal year ending June 30,1974, 
not to exceed $15,000,000 for the fiscal year ending June 30,1975, and 
not to exceed $20,000,000 for the fiscal year ending June 30, 1976. 
(b) Such sums as the Congress shall appropriate to carry out the 
purposes of this title pursuant to subsection (a) shall be distributed 
by the Secretary as follows: 
(1) 4 per centum to be used by the Secretary for Federal admin-
istrui'oru national coordination, and program assistance to the 
States; 
(2) 10 per centum to be allocated by the Secretary to States to 
finance work serving two or more States in which universities in 
two or more States cooperate or which is conducted by one uni-
versity to serve two or more States; 
(3) 20 per centum shall be allocated equally among the States; 
(4) 66 per centum shall be allocated to each State, as follows: 
One-half in an amount which bears the same ratio to the total 
amount to be allotted as the rural population of the States bears 
to the total rural population of all the States as determined by 
the last preceding decennial census current at the time each such 
additional sum is first appropriated; and one-half in an amount 
which bears the same ratio to the total amount to be allotted as 
the farm population of the State bears to the total farm popula-
tion of all the States as determined by the last preceding decennial 
census current at the time such 
additional 
sum is 
first 
appropriated. 
saTaHe'^T^^' 
(^') Fuuds appropriated under this title may be used to pay salaries 
and other expenses of personnel employed to carry out the functions 
86 STAT.] 
PUBLIC LAW 92-419-AUG. 30, 1972 
673 
authorized by this title, to obtain necessary supplies, equipment, 
ssrvices, and rent, repair, and maintenance of other facilities needed, 
but may not be used to purchase or construct buildinjjs. 
(d) Payment of funds to any State for programs authorized under 
section 502(a), (b), and (c) shall be contingent upon the Secretary's 
approval of an annual plan and budget for programs conducted under 
each part and compliance with such regulations as the Secretary may 
issue under this title. Funds shall be available for use by the State in 
the fiscal year for which appropriated and the next fiscal year following 
the year for which appropriated. Funds shall be budgeted and 
accounted for on such forms and at such times as tlie Secretary shall 
j)rescribe. 
(e) Funds provided to each State under this title may be used to 
finance programs through or at private and publicly supported col-
leges and universities other than the university responsible for admin-
istering the programs authorized by this title. 
SP:C. 504. COOPERATING COLLEGES AND I^NIVERSITIES.— (a) Each of 
the programs authorized by this title shall be organized and conducted 
by one or more colleges or universities in each State so as to jiiovide a 
coordinated program in each State. 
(b) To assure national coordination with programs under the Smith-
Lever Act of 1914 and the Hatch Act (as amended, August 11. 1955), 
administration of each State program shall be a responsibility of the 
institution or university accepting the benefits of the Morrill Act of 
1862 (12 Stat. 503) as amended. Such administration shall be in asso-
ciation with the programs conducted under the Smith-Lever Act and 
the Hatch Act. The Secretary shall pay funds available to each State 
to said institution or university. 
(c) All private and publicly supported colleges and universities in a 
State including the land-grant colleges of 1890 (26 Stat. 417) shall be 
eligible to conduct or participate in conducting programs authorized 
under this title. Officials at universities or colleges other than those 
responsible for administering programs authorized by this title who 
wish to participate in these programs shall submit program proposals 
to the university officials responsible for administering these programs 
and they shall be responsible for approval of said proposals. 
(d) The university in each State responsible for administering the 
program authorized by this title shall designate an official who shall be 
responsible for programs authorized by each part of section 502 and an 
official who shall be i-esponsible for the overall coordination of said 
programs. 
(e) The chief administrative officer of the university in each State 
responsible for administering the pi-ogram authorized by this title shall 
appoint a State Kural Development Advisoiy Council, consisting of 
not more than fifteen members. The administrative head of agriculture 
of that university shall serve as chairman. The administrative head of 
a principal school of engineering in the State shall be a member. There 
shall be at least ten additional members who shall include persons rep-
resenting farmers, business, labor, banking, local government, multi-
county planning and development districts, public and private colleges 
and Federal and State agencies involved in rural development. 
It shall be the function of the Council to review and approve annual 
program plans conducted under this title and to advise the chief 
administrative officer of the university on mattei-s pertaining to the 
program authorized. 
SEC. 505. AGREEMENTS AND PIANS.—(a) 
Prograjns authorized 
under this title shall be conducted as mutually agreed upon by the 
Secretary and the university responsible for administering said pro-
grams in a memoiandum of understanding which shall provide for 
State programs, 
administration. 
67 Stat. 83. 
69 Stat. 671. 
7 use 341, 
361a, 
7 use 301. 
7 use 321 .and 
notes. 
Program pro-
posals. 
Officials, desig-
nation. 
State Rural 
Development 
Advisory Council, 
appointment. 
674 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
the coordination of the programs authorized under- this title, coordi-
nation of these programs with other rural development programs of 
Federal, State, and local government, and such other matters as the 
Secretary shall determine. 
ram""ian^'^°' 
(^) Aunuallj Said university shall submit to the Secretary an annual 
program plan for programs authorized under this title which shall 
include plans for the programs to be conducted by each cooperating 
and participating university or college and such other information as 
the Secretary shall prescribe. Each State program must include 
research and extension activities directed toward identification of pro-
grams which are likely to have the greatest impact upon accomplishing 
the objectives of rural development in both the short and longer term 
and the use of these studies to support the State's comprehensive 
program to be supported under this title. 
SEC. 506. WITHHOLDING FUNDS.—When the Secretary determines 
that a State is not eligible to receive part or all of the funds to which 
it is otherwise entitled because of a failure to satisfy conditions speci-
fied in this title, or because of a failure to comply with regulations 
Report to 
issucd by the Secretary under this title, the facts and reasons therefor 
shall be reported to the President, and the amount involved shall be 
kept separate in the Treasury until the expiration of the Congress next 
succeeding a session of the legislature of the State fi'om which funds 
have been withheld in order that the State may, if it should so desire, 
appeal to Congress from the determination of the Secretary. If the 
next Congress shall not direct such sum to be paid, it shall be covered 
into the Treasury. If any portion of the moneys received by the desig-
nated officers of any State for the support and maintenance of pro-
grams authorized by this title shall by any action or contingency be 
diminished or lost, or be misapplied, it shall be replaced by said State. 
SEC. 507. DEFINITIONS.—For the purposes of this title— 
(a) "Rural development" means the planning, financing, and devel-
opment of facilities and services in rural areas that contribute to mak-
ing these areas desirable places in which to live and make private and 
business investments; the planning, development, and expansion of 
business and industry in rural areas to provide increased employment 
and income; the planning, development, conservation, and use of land, 
water, and other natural resources of rural areas to maintain or 
enhance the quality of the environment for people and business in rural 
areas; and processes and procedures that have said objectives as their 
major purposes. 
(b) The word "State" means the several States and the Common-
wealth of Puerto Rico. 
SEC. 508. REGULATIONS.—The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this title. 
TITLE VI—MISCELLANEOUS 
SEC. 601. LOCATION or OFFICES IN RURAL AREAS.—Section 901(b) of 
42 use 3122. 
^^^ j^^^ 
^f November 30, 1970 (84 Stat. 1383), is amended to read as 
follows: 
"(b) Congress hereby directs the heads of all executive departments 
and agencies of the Government to establish and maintain depart-
mental policies and procedures giving first priority to the location of 
new offices and other facilities in rural areas as defined in the private 
business enterprise exception in section 306(a) (7) of the Consolidated 
Farmers Home Administration Act of 1961, as amended (7 U.S.C. 
Repo'rt^to Con- 
1926). The President is hereby requested to submit to the Congress not 
gress. 
later than September 1 of each fiscal year a report reflecting the efforts 
during the immediately preceding fiscal year of all executive depart-
ments and agencies in carrying out the provisions of this section, citing 
86 STAT. ] 
PUBLIC LAW 92-419-AUG. 30, 1972 
675 
the location of all new facilities, and including a statement covering the 
basic reasons for the selection of all new locations.'' 
SEC. 602. DESP:RTLAND ENTRYMEX.— (a) The first sentence of the 
Act entitled "An Act to enable the Secretary of Agriculture to extend 
financial assistance to homestead entry 
men, and for other purposes", 
approved October 19, 1949 (63 Stat. 883; 7 U.S.C. 1006a), is amended 
by striking out "homestead entry" and inserting in lieu thereof "home-
stead or desertland entry". 
(b) The last sentence of the first section of such Act is amended by 
striking out "reclamation project" and inserting in lieu thereof "recla-
mation project or to an entryman under the desertland laws". 
SEC. 603. COORDINATION OF RURAL DEVELOPMENT ACTIVITIES.— (a) 
Section 520 of the Revised Statutes (7 U.S.C. 2201) is amended by— 
(1) inserting the words "and rural development" after the 
words "with agriculture", and; 
(2) striking "that word" and inserting in lieu thereof "those 
terms". 
(b) Section 526 of the Revised Statutes (7 U.S.C\ 2204) is amended 
]\v— 
(1) inserting " (a)" before the first sentence; 
(2) inserting the words "and rural development" after the 
words "concerning agriculture"; 
(3) striking out the period at the end of the section and insert-
ing in lieu thereof the following: "; and he shall advise the 
President, other members of his Cabinet, and the Congress on 
policies and programs designed to improve the quality of life for 
people living in the rural and nonmetropolitan regions of the 
Nation."; and 
(4) adding at the end of the section a new subsection as follows: 
"(b) The Secretary of Agriculture is authorized and directed to ruml^dev'^i^^r 
provide leadership and coordination within the executive branch and p"ogramy 
shall assume responsibility for coordinating a nationwide rural 
development program utilizing the services of executive branch depart-
ments and agencies and the agencies, bureaus, offices, and services of 
the Department of Agriculture in coordination with rural develo])-
ment programs of State and local governments. In carrying out this 
Report to con-
responsibility the Secretary of Agriculture shall establish employment, 
income, population, housing, and quality of community services and 
facilities goals for rural development and report annually prior to 
September 1 to Congress on progress in attaining such goals. The 
Secretary is authorized to initiate or expand research and develop-
ment efforts related to solution of problems of rural water supply, 
rural sewage and solid waste management, rural housing, and rural 
industrialization." 
(c) (1) The Secretary of Agriculture shall utilize to the maximum 
extent practicable State, regional, district, county, local, or other 
Department of Agriculture offices to enhance rural development, and 
shall to the maximum extent practicable provide directly, or, in the 
case of agencies outside of the Department of Agriculture, through 
arrangements with the heads of such agencies, for— 
(A) the location of all field units of the Federal Government 
concerned with rural development in the appropriate Department 
of Agriculture offices covering the geographical areas most simi-
lar to those covered by such field units, and 
(B) the interchange of personnel and facilities in each such 
office to the extent necessary or desirable to achieve the most effi-
cient utilization of such personnel and facilities and provide the 
most effective assistance in the development of rural areas in 
accordance with State rural development plans. 
rural development 
gress. 
676 
PUBLIC LAW 92-419-AUG. 30, 1972 
[86 STAT. 
80 Stat. 461. 
52 Stat. 31; 
78 Stat. 743. 
16 u s e 590h. 
49 Stat. 1148. 
16 u s e 590g. 
Termination. 
52 Stat. 31. 
16 u s e 590h. 
(2) The Secretary shall include in the report required by this sec-
tion a report on projjress made in carrying out paragraph (1) of this 
subsection, tofjethor with such recommendations as may bo appropriate. 
SEC. (i()4. ADnnioxAi. ASSISTANT SIOCUKTAKY OF AUHK rj;ri HK.— (a) 
Fu addition to the Assistant Secretaries of Agriculture now ])rovided 
for by law, there sliall be one additional Assistant Secretary of Agri-
culture, who shall be appointed by the President, by and with tlie 
advice and consent of the Senate. 
(b) Section 5315(11) of title 5, United States ('ode, is amended to 
read as follows: 
"(11) Assistant Secretaries of Agriculture (4)." 
SEC. H05. LONO-TERM RURAL ENVIRONMENTAL PROTECTION CON-
TRACTS.—Subsection (b) of section 8 of the Soil Consei'vation and 
Domestic Allotment Act, as amended (49 Stat. 1H8; IH T.S.C. 59()a). 
is further amended by adding a new paragraph at the end thereof as 
follows: 
"In carrying out the purposes of subsection (a) of section T, the Sec-
retary may enter into agreements with agricultural j^roducers for pe-
liods not to exceed ten years, on such terms and conditions as the 
Secretary deems desirable, creating obligations in advance of appro-
priations not to exceed such amounts as may be specified in annual 
appropriation Acts. Such agreements (i) shall be based on conserva-
tion plans approved by the soil and water conservation district or 
districts in which the lands described in the agreements are situated, 
and (ii) may be modified or terminated b^/' mutual consent if the Sec-
retary determines such action would be in the public interest. The 
Secretary also may terminate agreements if he determines such action 
to be in the national interest and provides public notice in ample time 
to give pT'oducers a i-easonable opportunity to make an-angements foi-
iippropriate changes in the use of their land." 
SKC. ()()0. CCST SlL-XRlNG F
O
R AGRICULTURE-JRELATED I^OLLITIOX l^RE-
VENTION AND ABATEMENT MEASURES.—The Soil Conservation and 
I )omestic Allotment Act, as amended (49 Stat. 163:16 TT.S.C. 590a). is 
further amended— 
(1) By striking in section 7(a) the word "and'' immediately before 
clause (5), substituting a semicolon for the period at the end of clause 
(5), and adding the following: "and (H) prevention and abatement 
of agricultural-related pollution.". 
(2) By changing the first sentence of section 8(b) to read as follows: 
"The Secretary shall have power to carry out the purposes specified in 
clauses (1). (2). (3), (4), (5), and (6) of section 7(a) by making pay-
ments or grants of other aid to agricultural producers, including ten-
ants and sharecroppers, in amounts determined by the Secretary to be 
fair and i-easonable in connection with the efl'ectuation of such pur-
poses during the year with respect to which such payments or grants 
are made, and measured by (1) their treatment or use of their land, or 
a part thereof, for soil restoration, soil conservation, the prevention 
of erosion, or the prevention or abatement of agriculture-related pol-
lution; (2) changes in the use of their land; (3) their equitable share, 
as determined by the Secretary, of the normal national production of 
any commodity or commodities required for domestic consumption: 
(4) their equitable share, as determined by the Secretary, of the 
national production of any commodity or commodities required for 
domestic consumption and. exports adjusted to reflect the extent to 
which their utilization of cropland on the farm conforms to farming-
practices which the Secretary determines will best effectuate the pur-
l)oses specified in section 7(a); or (5) any combination of the above.'' 
86 
STAT.] 
PUBLIC LAW 92-420-SEPT. 16, 1972 
677 
(3) By inserting in the second paragraph of section 8(b) after the 
w(^rds "soil-building services" in the two places where they occur the 
words "or pollution prevention or abatement aids'' and after tlie words 
"soil-conserving ])ractices" tlie words "or pollution ])reveiition or 
abatement jiracticos". 
(4) By striking "or (o)"' in the first seiitence of section 8(d) and 
substituting "(5). or (())'". 
(5) By inserting in the proviso of section 8(e) after the words "soil-
building or soil-conserving practices" the words "or agriculture-
related pollution pi-evention or abatement practices". 
(6) By striking the words "soil-building practices and soil- and 
water-conserving practices" in the penultimate sentence of section 15 
and substituting "soil-building practices, soil- and watei--conserving 
practices, and agriculture-related pollution prevention and abatement 
piactices". 
Approved August 30, 1972. 
55 Stat. 257. 
16 u s e 590h. 
52 Stat. 33. 
52 Stat. 34; 
56 Stat. 761. 
68 Stat. 908. 
16 u s e 590o. 
Public Law 92-420 
: 
A N A C T 
September 16, 1972 
To amend rhe Xarcutic Addict Rehabilitation Act of 1966, and for other purposes. 
[H. R. 9323] 
Be it enncted hy the Senate and House of RepresentatlveH of the 
United States of Amenca in Congress assembled^ That this Act may be 
cited as the "Xarcotic Addict Rehabilitation Amendments of 1971". 
SEC. 2. Section 2901(d) of title 28, United States Code, is amended 
to read as follows: 
"(d) 'Treatment* includes confinement and treatment in an institu-
tion and under supervised aftercare in the community and includes, but 
is not limited to, medical, educational, social, psychological, and voca-
tional services, corrective and preventive guidance and training, and 
other rehabilitative services designed to protect the public and benefit 
the addict by eliminating his dependence on addicting dru^s, or by 
controlling his dependence, and his susceptibility to addiction." 
SEC. 3. Section 4251(c) of title 18, United States Code, is amended 
to read as follows: 
"(c) 'Treatment- includes confinement and treatment in an institu-
tion and under supervised aftercare in the community and includes, 
but is not limited to, medical, educational, social, psychological, and 
vocational services, corrective and preventive guidance and training, 
and other rehabilitative services designed to protect the public and 
benefit the addict by eliminating his dependence on addicting drugs, or 
by controlling his dependence, and his susceptibility to addiction." 
SEC. 4. Section 301(b) of the Narcotic Addict Rehabilitation Act 
of 1966 (80 Stat. 1444; 42 U.S.C. 3411(b)), is amended to read as 
follows: 
"(b) 'Treatment' includes confinement and treatment in a hospital 
of the Service and under supervised aftercare in the community and 
includes, but is not limited to, medical, educational, social, psycho-
logical, and vocational services, corrective and j)r6ventive guidance 
and training, and other rehabilitative services designed to protect the 
public and benefit the addict by eliminating his dependence on addict-
ing drugs, or by controlling his dependence, and his susceptibility to 
addiction." 
SEC. 5. This Act shall take effect immediately upon enactment. 
Sections 2 and 3 shall apply to any case pending in a district court of 
the United States in which an appearance has not been made prior to 
the effective date. 
Approved September 16, 1972. 
Narcotic Addict 
Rehabilitation 
Amendments of 
1971. 
80 Stat. 1438. 
Effective date.