Drought Assistance Amendment

Drought Assistance Amendment - Title I: Amendments to the Disaster Relief Act of 1974 - Declares the finding of Congress that droughts and other similar non-cataclysmic disasters require Federal assistance. Requires the President to appoint a Federal coordinator to operate in an area declared a drought emergency area. Permits Federal agencies to provide assistance to drought emergency areas by performing any emergency service essential to save lives and property, including: (1) conservation practices; (2) water supply investigations; (3) education training in conservation techniques for farmers and other affected persons; (4) provisions for water needs and the movement of supplies or persons; (5) the establishment of comprehensive employment and/or manpower training programs; and (6) contributions to State or local governments to carry out the provisions of this Act.

Directs that where Federal funds for assistance activities may go by contract to private organizations or firms, preference be given to such organizations or firms in the drought emergency area.

Authorizes the President to make grants to States for the purpose of State grants to individuals or families adversely affected by a drought emergency to meet necessary expenses; and to make temporary mortgage or rental payments on behalf of individuals or families who have received written notice of foreclosure on land or equipment as a result of financial hardship caused by drought.

Provides for loans to local governments losing revenues as a result of a drought emergency.

Title II: Amendments to the Public Works and Economic Development Act of 1965 - Extends to drought emergency areas assistance for economic recovery following the period of emergency aid and replacement of essential facilities and services. Extends coverage of federally-guaranteed loans to the purchase of land and facilities for farming usage.

Title III: Miscellaneous Provisions - Makes areas suffering an emergency of any sort eligible for Federal assistance for current school expenditures.

Extends eligibility for small business loans under the Small Business Act to businesses in drought emergency areas and limits the interest rate on the Small Business Administrator's share of the loan to one percent annually.