To authorize the Small Business Administration to make grants and loans to small business concerns, and grants to agricultural enterprises, to enable such concerns and enterprises to reopen for business after a natural or other disaster.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Disaster Assistance 
Act of 2001''.

SEC. 2. DISASTER ASSISTANCE TO REOPEN SMALL BUSINESS CONCERNS AND 
              AGRICULTURAL ENTERPRISES.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended--
            (1) in subsection (b), by inserting before the undesignated 
        paragraph that begins with ``No loan under this subsection,'' 
        the following:
    ``(4) In accordance with subsection (o), the Administration may 
make grants and loans under this subsection.''; and
            (2) by adding at the end the following:
    ``(o) Disaster Assistance Programs To Reopen Small Business 
Concerns and Agricultural Enterprises.--
            ``(1) Grant program.--
                    ``(A) In general.--In accordance with this 
                subsection and subsection (b) (to the extent that 
                subsection (b) is not inconsistent with this 
                subsection), the Administration may make grants to 
                small business concerns and agricultural enterprises 
                following a natural or other disaster to assist such 
                concerns and enterprises in reopening for business.
                    ``(B) Eligibility.--A small business concern or 
                agricultural enterprise may receive a grant under this 
                paragraph only if it--
                            ``(i) was a viable business concern (as 
                        determined by the Administration) at the time 
                        of the disaster; and
                            ``(ii) is likely to be a viable business 
                        concern (as determined by the Administration) 
                        after receiving assistance under this 
                        subsection.
                    ``(C) Maximum.--The Administration may make no 
                grant under this paragraph that exceeds $30,000.
                    ``(D) Timing.--In making grants under this 
                paragraph, the Administration shall disburse grant 
                funds as soon as is practicable after a disaster.
            ``(2) Loan program.--
                    ``(A) In general.--In accordance with this 
                subsection and subsection (b) (to the extent that 
                subsection (b) is not inconsistent with this 
                subsection), the Administration may make loans to small 
                business concerns following a natural or other disaster 
to assist such concerns in reopening and remaining open for business.
                    ``(B) Direct and guaranteed loans permissible.--The 
                Administration may make loans under this paragraph 
                either directly or in cooperation with banks or other 
                lending institutions through agreements to participate 
                on an immediate or deferred (guaranteed) basis.
                    ``(C) Repayment.--
                            ``(i) One-year deferral.--The 
                        Administration may not require the borrower 
                        with respect to a loan made under this 
                        paragraph to repay any principal of the loan, 
                        or any interest on such principal, before the 
                        date that is 1 year after the date on which the 
                        proceeds of the loan are disbursed.
                            ``(ii) Application of repaid amounts.--The 
                        Administration shall apply all amounts repaid 
                        with respect to a loan made under this 
                        paragraph--
                                    ``(I) to the principal of the loan; 
                                and
                                    ``(II) to the extent that such 
                                amounts are sufficient, to the interest 
                                on such principal.
            ``(3) Limitation on eligibility.--Notwithstanding any other 
        provision of this subsection, the Administration may not make 
        assistance available under this subsection to any person, 
        concern, or enterprise that is in default of any outstanding--
                    ``(A) Federal obligation;
                    ``(B) child support obligation; or
                    ``(C) judgment of a Federal or State court.
            ``(4) Use of proceeds.--As a condition of receiving a grant 
        or loan under this subsection, the Administration shall require 
        the recipient to--
                    ``(A) agree to use the proceeds of such grant or 
                loan only to repair or replace items and structures 
                that were lost or damaged as a result of a disaster; 
                and
                    ``(B) agree not to use any of the proceeds of such 
                grant or loan for relocation, unless the recipient is 
                directed by a government agency to relocate for safety, 
                health, or mitigation purposes.
            ``(5) Flood insurance.--As a condition of receiving a grant 
        or loan under this subsection, the Administration shall require 
        each recipient that operates in a location that the 
        Administration determines is prone to flooding--
                    ``(A) to obtain flood insurance, or to ensure that 
                such insurance is obtained, for the maximum insurable 
                value of the concern's structure (whether owned or 
                leased) and the contents of such structure; and
                    ``(B) to maintain such flood insurance for the 
                period of time that the concern continues to operate in 
                such a location.
            ``(6) Agricultural enterprises.--
                    ``(A) Defined.--In this subsection, the term 
                `agricultural enterprise' means--
                            ``(i) an agricultural enterprise within the 
                        meaning of the term under section 3(a); and
                            ``(ii) a farm not larger than a family farm 
                        within the meaning of such term under section 
                        321 of the Consolidated Farm and Rural 
                        Development Act (7 U.S.C. 1961).
                    ``(B) Consultation requirement.--Before issuing 
                regulations to implement paragraph (1), the 
                Administration shall consult with the Secretary of 
                Agriculture with respect to the effect of such 
                regulations on agricultural enterprises.''.

SEC. 3. CONFORMING AMENDMENT.

    Section 4(f)(1) (15 U.S.C. 633(f)(1)) of the Small Business Act is 
amended by striking ``section 462(b) of the Social Security Act'' and 
inserting ``section 459 of the Social Security Act''.

SEC. 4. APPLICABILITY.

    The amendments made by section 2 shall apply to any major disaster 
declared after September 1, 1999.

Summary: Small Business Disaster Assistance Act of 2001 - Authorizes the Small Business Administration (SBA) to make grants to small businesses and agricultural enterprises following a natural or other disaster to assist such entities in reopening for business. Limits such grants to $30,000 per entity. Authorizes the SBA to make loans, either directly or through banks or other lending institutions, to small businesses following a natural or other disaster to assist such businesses in reopening. Outlines loan requirements, including requiring businesses operating in flood-prone areas to carry flood insurance.