Currently there are federal laws that mandate the proper removal of paint containing lead which affect contractors, landlords, and child care providers, but not individual home owners, specifically.
We are required by the Environmental Protection Agency (EPA) to present a booklet to our clients living in homes built before 1978 when the work we do will involve disturbing any painted surface. You may find this book gives you a basic understanding of lead paint issues and laws, and you can read the pdf at this link. Also, the EPA’s page on lead has a lot of useful information.
In our experience, the cost of sanding, repairing and painting existing wood siding becomes more expensive than replacing it with new siding. But if you wish to keep your original siding, you should find a licensed lead abatement contractor to do the job properly. This Missouri website gives you a list of licensed contractors.