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ticipating business and any other assistance which is 
approved by the Administrator. 
(6) ADDITIONAL PROGRAM REQUIREMENTS.—
(A) 
PARTICIPATING
BUSINESSES.—Each 
grantee shall select the businesses which will par-
ticipate in the grantee’s small business incuba-
tion program. The grantee shall select businesses 
which are not yet well established but which have 
the potential to be self-sustaining. Each grantee 
shall require participating businesses to partici-
pate in the training described in paragraph 
(4)(D), to submit marketing, financial, and busi-
ness plans and to participate in the review of 
such plans described in paragraph (4)(G). 
(B) 
COOPERATIVE
AGREEMENTS
WITH 
LENDERS.—Each grantee shall enter into a coop-
erative agreement with one or more lenders to 
provide a streamlined process by which partici-
pating businesses may obtain loans, including 
loans under subsection (c). 
(C) FEES.—Each grantee may charge par-
ticipating businesses a fee for the assistance pro-
vided to such business by the grantee. The 
amount of such fee shall be determined under a 
sliding scale based on the financial success of the
423
participating business. The grantee may not 
charge a participating business a fee for the first 
2 years of such businesses participation in the 
incubator. 
(7) NON-FEDERAL MATCHING FUNDS.—The Ad-
ministrator shall not make available any grant funds 
under this subsection until the grantee has contrib-
uted non-Federal matching funds in an amount equal 
to 50 percent of the amount of such grant funds. 
(8) ELIGIBLE ORGANIZATIONS.—For purposes of 
this section, the term ‘‘eligible organization’’ means 
any of the following: 
(A) An organization described in section 
501(c)(3) of the Internal Revenue Code of 1986 
and exempt from tax under section 501(a) of 
such Code. 
(B) A business league, chamber of com-
merce, or board of trade described in section 
501(c)(6) of the Internal Revenue Code of 1986 
and exempt from tax under section 501(a) of 
such Code. 
(C) A local development agency that is 
chartered, established, or otherwise sanctioned by 
a State or local government.
424
(D) A small business development center 
(within the meaning of section 21 of the Small 
Business Act). 
(E) A college or university. 
(F) A unit of State or local government. 
(9) FEDERAL
COORDINATION.—The Adminis-
trator, in consultation with the Economic Develop-
ment Administration and the Minority Business De-
velopment Agency, shall—
(A) undertake efforts to coordinate and en-
hance Federal programs that relate to small 
business incubation programs; and 
(B) invite State and local governments, 
lending institutions, and other appropriate pub-
lic and private organizations to serve as inter-
mediaries in outreach efforts related to small 
business incubation programs. 
(10) TERMINATION.—The Administrator shall 
not make any new 5-year grants under this subsection 
after the end of the 180-day period beginning on the 
date that funds are first made available to carry out 
this subsection.
(11) REPORTS.—
(A) INITIAL REPORT.—One year after the 
first grant is made under this subsection, the Ad-
426
small business incubation program described in sub-
section (b). 
(2) LOAN TERMS.—
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the rules which apply under 
the Small Business Act to loans made under sec-
tion 7(a) shall apply with respect to loans made 
under this subsection. 
(B) SPECIAL RULES FOR DEFERRED PAR-
TICIPATION LOANS.—In the case of an agreement 
to participate on a deferred basis in any such 
loan: 
(i) Such participation by the Adminis-
tration shall be equal to 90 percent of the 
balance of the financing outstanding at the 
time of the disbursement of the loan. 
(ii) The Administrator shall collect 
(except in the case of a loan that is repay-
able in 1 year or less) a guarantee fee, 
which shall be payable by the participating 
lender and may be charged to the borrower 
as follows: 
(I) A guarantee fee equal to 0.5 
percent of the deferred participation
427
share of a total loan amount that is 
not more than $150,000. 
(II) A guarantee fee equal to 1.5 
percent of the deferred participation 
share of a total loan amount that is 
more than $150,000, but not more than 
$700,000. 
(III) A guarantee fee equal to 2 
percent of the deferred participation 
share of a total loan amount that is 
more than $700,000. 
(iii) The annual fee assessed and col-
lected on any such loan shall not exceed an 
amount equal to 0.15 percent of the out-
standing balance of the deferred participa-
tion share of the loan. 
(iv) The Administrator may make such 
loans without regard to the ability of a 
small business concern to obtain credit else-
where. 
(v) The Administrator shall make such 
loans without regard to the availability of 
collateral to secure such loans.
428
(vi) The Administrator may charge in-
terest on any such loan. Such charge may 
not exceed a rate of 4 percent per year. 
(3) REGULATIONS.—Not later than 120 days 
after the date of enactment of this Act, the Adminis-
trator shall issue interim final rules and guidelines to 
implement this subsection. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for fiscal 
year 2004 such sums as may be necessary to carry 
out this subsection, which sums shall remain available 
until expended. 
SEC. 316. REPORT REGARDING EFFECTS OF SALE OF DIS-
ASTER LOANS ON BORROWERS. 
Not later than 1 year after the date of the enactment 
of this Act, the Chief Counsel for Advocacy of the Small 
Business Administration shall report to the Congress re-
garding the sale by the Administrator of loans made under 
section 7(b) of the Small Business Act. Such report shall 
include the following: 
(1) A description of the effects of such sales on 
borrowers. 
(2) A description of the effects that prohibiting 
such sales would have on the operations of the Admin-
istration.
429
(3) Any recommendations of the Chief Counsel 
for Advocacy for reducing the effects of such sales on 
borrowers.
SEC. 317. SUSPENSION AND EXTENSION OF CERTAIN DIS-
ASTER LOANS RELATED TO THE TERRORIST 
ATTACKS OF SEPTEMBER 11, 2001. 
(a) IN GENERAL.—With respect to any loan made 
under section 7(b) of the Small Business Act to a qualified 
small business concern as a result of the terrorist attacks 
against the United States that occurred on September 11, 
2001, the Administrator shall, upon application by such 
concern during the 2-year period beginning on the date of 
the enactment of this Act, suspend the payment of principal 
and interest charges on, and extend the maturity of, the 
Federal share of such loan for a period of not less than 2 
years and not more than 5 years. 
(b) QUALIFIED SMALL BUSINESS CONCERN.—For pur-
poses of this section, the term ‘‘qualified small business con-
cern’’ means, with respect to any loan made to such concern 
under section 7(b) of the Small Business Act, a small busi-
ness concern that—
(1) was located in an area described in section 
314(a)(2) on September 11, 2001; and
430
(2) would suffer substantial economic injury if 
required to make the scheduled payments under such 
loan. 
(c) SUBSTANTIAL ECONOMIC INJURY.—For purposes of 
this section, the term ‘‘substantial economic injury’’ has the 
meaning given such term in section 7(b)(3)(A)(iii) of the 
Small Business Act. 
SEC. 318. DEFINITIONS. 
For purposes of this title: 
(1) 
ADMINISTRATOR.—The 
term 
‘‘Adminis-
trator’’ means the Administrator of the Small Busi-
ness Administration. 
(2) ADMINISTRATION.—The term ‘‘Administra-
tion’’ means the Small Business Administration. 
(3) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the meaning given such 
term pursuant to section 3(a) of the Small Business 
Act.