the Administrator rejects a second application, that 
shall be considered final agency action for purposes 
of chapter 7 of title 5, United States Code. 
‘‘(b) STANDARDS FOR OBTAINING PREMIER CER-
TIFIED DEVELOPMENT COMPANY STATUS.—The Admin-
istrator shall designate an accredited certified develop-
ment company as a premier certified development com-
pany if the application submitted pursuant to subsection 
(a) demonstrates that the accredited certified development 
company meets the following standards: 
‘‘(1) Has been an accredited certified develop-
ment company for at least 12 months. 
‘‘(2) Has submitted to the Administrator ade-
quately analyzed debenture guarantee applications. 
‘‘(3) Has closed, in a proper manner following 
the Administrator regulations, loans under this title. 
‘‘(4) Has serviced its loan portfolio in accord-
ance with the standards set by the Administrator. 
‘‘(5) Has established a loan loss reserve estab-
lished in accordance with this section that the Ad-
ministrator determines is sufficient to meet its obli-
gations to protect the Federal Government from the 
risk of loss on each debenture guaranteed under this 
section. 
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‘‘(6) Has agreed, as part of the application and 
in order to protect the Federal Government against 
the risk of loss, to the following: 
‘‘(A) on account of a debenture, the pro-
ceeds of which were used to fund a loan ap-
proved prior to the date of enactment of the 
Job Creation and Economic Development 
through CDC Modernization Act of 2009, 
agrees to reimburse the Administrator for 10 
percent of any loss sustained by the Adminis-
trator as a result of a default by the company 
in the payment of principal or interest on a de-
benture issued by such company and guaran-
teed by the Administrator; 
‘‘(B) on account of a debenture, the pro-
ceeds of which were used to fund a loan ap-
proved prior to the date of enactment of the 
Job Creation and Economic Development 
through CDC Modernization Act of 2009 and 
which were issued during the period in which 
the company had made a selection pursuant to 
section 508(c)(7) of the Small Business Invest-
ment Act of 1958, as in effect on the day before 
such date of enactment, agrees to reimburse the 
Administrator for 15 percent of any loss sus-
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tained by the Administrator as a result of a de-
fault by the company in the payment of prin-
cipal or interest on a debenture issued by such 
company and guaranteed by the Administrator; 
or 
‘‘(C) on account of a debenture, the pro-
ceeds of which are used to fund a loan approved 
on or after the date of enactment of the Job 
Creation and Economic Development through 
CDC Modernization Act of 2009, upon closing, 
pay to the Administrator a one-time participa-
tion fee in the amount equal to the higher of 
the following: 
‘‘(i) 0.25 percent of the amount of the 
debenture. 
‘‘(ii) A percent of the amount of the 
debenture equal to 10 percent of the 
amount of the company’s historic loss rate 
on debentures guaranteed under this sec-
tion as determined by the Administrator. 
The rate specified by this clause shall be 
determined annually based upon the com-
pany’s loan losses as of close of business 
on June 30th and notice of the determina-
tion shall be provided to each company not 
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later than August 31. Such rate shall be 
applicable to loans approved during the fis-
cal year commencing after the determina-
tion is made and shall expire and have no 
further application after the end of such 
fiscal year. If no timely determination has 
been made prior to the commencement of 
a fiscal year, including the year of enact-
ment of the Job Creation and Economic 
Development through CDC Modernization 
Act of 2009, one may be made after the 
commencement and it shall be applicable 
to loans approved during the balance of 
such fiscal year commencing 30 days after 
notification to the development company 
involved. 
‘‘(c) SUSPENSION OR REVOCATION OF PREMIER STA-
TUS.—The Administrator may suspend or revoke an ac-
credited certified development company’s premier status 
if the Administrator determines, after a hearing on the 
record as set forth in section 554, 556, and 557 of title 
5, United States Code, that the accredited certified devel-
opment company no longer meets the eligibility criteria for 
premier status as established under this section or failed 
to adhere to the Administrator’s rules, regulations, or is 
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violating some other provision of law. Such revocation or 
suspension shall have no effect on its status as an accred-
ited certified development company. 
‘‘(d) LOAN LOSS RESERVE.— 
‘‘(1) ASSETS.—Each loan loss reserve main-
tained by the premier certified development company 
for loans made pursuant to the authority in sub-
section (g)(1) shall be comprised of— 
‘‘(A) segregated funds on deposit in an ac-
count or accounts with a federally insured de-
pository institution or institutions selected by 
the company, subject to a collateral assignment 
in favor of, and in a format acceptable to, the 
Administrator that shall amount to 10 percent 
of the company’s exposure as determined pursu-
ant to subsection (b)(6); 
‘‘(B) irrevocable letter or letters of credit, 
with a collateral assignment in favor of, and a 
commercially reasonable format acceptable to, 
the Administrator; or 
‘‘(C) any combination of the assets de-
scribed in subparagraphs (A) and (B). 
‘‘(2) CONTRIBUTIONS.—The company shall 
make contributions to the loss reserve, either cash or 
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letters of credit as provided above, in the following 
amounts and at the following intervals: 
‘‘(A) 50 percent when a debenture is 
closed. 
‘‘(B) 25 percent additional not later than 
1 year after a debenture is closed. 
‘‘(C) 25 percent additional not later than 
2 years after a debenture is closed. 
‘‘(3) REPLENISHMENT.—If a loss has been sus-
tained by the Administrator, any portion of the loss 
reserve, and other funds provided by the premier 
certified development company as necessary, may be 
used to reimburse the Administrator for the premier 
certified development company’s share of the loss as 
provided for in subsection (b)(6). If the premier cer-
tified development company utilizes the reserve, it 
shall, within 30 calendar days, replace an equivalent 
amount of funds. 
‘‘(4) DISBURSEMENTS.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall allow the premier certified development 
company to withdraw from the loss reserve 
amounts attributable to any debenture that has 
been repaid. 
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‘‘(B) 
REDUCTION.—The 
Administrator 
shall allow the premier certified development to 
withdraw from the loss reserve such amounts as 
are in excess of 1 percent of the aggregate out-
standing balances of debentures to which such 
loss reserve relates. The reduction authorized 
by this subparagraph shall not apply with re-
spect to any debenture before 100 percent of 
the contribution described in paragraph (2) 
with respect to such debenture has been made. 
‘‘(C) RULE OF CONSTRUCTION.—The pro-
vision contained in subparagraph (B) shall be 
read as if enacted prior to a date 2 years and 
90 days after the date of enactment of the Job 
Creation and Economic Development through 
CDC Modernization Act of 2009. 
‘‘(e) BUREAU OF PREMIER CERTIFIED DEVELOP-
MENT COMPANY LENDER OVERSIGHT.— 
‘‘(1) IN GENERAL.—There is hereby established 
a Bureau of Premier Certified Development Com-
pany Lender Oversight in the Office of Lender Over-
sight at the United States Small Business Adminis-
tration which shall have responsibility and capability 
for carrying out oversight of premier certified devel-
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opment companies and such other responsibilities as 
the Administrator designates. 
‘‘(2) ANNUAL
REVIEW.—The Bureau estab-
lished in paragraph (1) annually shall review the fi-
nancing made by each premier certified development 
company. Such review shall include the premier cer-
tified development company’s credit decisions and 
general compliance with the eligibility requirements 
for each financing approved as a result of its status 
as a premier certified development company. 
‘‘(3) RANDOM AUDITS.—The Bureau shall de-
velop and implement a method for sampling the de-
bentures issued by premier certified development 
companies. Such sampling shall be similar to the 
random file audits of development companies that 
utilize the Abridged Submission Method described in 
chapter 4 of subpart C of Standard Operating Pro-
cedure 50 10 (5)(A) as was in effect on March 2, 
2009. 
‘‘(4) REVIEW OF LENDERS PROVIDING SENIOR 
FINANCING.— 
‘‘(A) 
CALCULATION
OF
LOAN
LOSS 
RATE.—The Bureau shall periodically calculate 
the loss rate of all debentures approved under 
this section and shall calculate a loss rate on 
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the basis of the total debentures attributable to 
projects approved by premier certified develop-
ment companies in which each lender is a par-
ticipating lender. 
‘‘(B) NOTIFICATION.—If the Bureau deter-
mines that the loss rate on debentures involving 
an individual lender exceeds the average for all 
debentures approved under this section, it shall 
advise the Administrator. 
‘‘(5) USE OF REVIEWS AND AUDITS.—The Ad-
ministrator shall consider the findings under para-
graphs (2), (3), and (4) in carrying out the respon-
sibilities under subsection (h). 
‘‘(f) SALE OF CERTAIN DEFAULTED LOANS.— 
‘‘(1) NOTICE.—If, upon default in repayment, 
the Administrator acquires a debenture issued by a 
premier certified development company and identi-
fies such loan for inclusion in a bulk asset sale of 
defaulted or repurchased loans or other financing, it 
shall give prior notice thereof to any premier cer-
tified development company which has a contingent 
liability under this section. The notice shall be given 
to the premier certified development company as 
soon as possible after the financing is identified, but 
not less than 90 days before the date the Adminis-
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trator first makes any records on such financing 
available for examination by prospective purchasers 
prior to its offering in a package of loans for bulk 
sale. 
‘‘(2) LIMITATIONS.—The Administrator shall 
not offer any loan described in paragraph (1) as 
part of a bulk sale unless it— 
‘‘(A) provides prospective purchasers with 
the opportunity to examine the Small Business 
Administration’s records with respect to such 
loan; and 
‘‘(B) provides the notice required by para-
graph (1). 
‘‘(g) LOAN APPROVAL AUTHORITY.— 
‘‘(1) IN GENERAL.—A premier certified develop-
ment company may, under conditions determined by 
the Administrator in regulations published in the 
Code of Federal Regulations, issue guarantees on 
debentures, approve, authorize, close, service, fore-
close, litigate (except that the Administrator may 
monitor conduct of any such litigation), and liq-
uidate loans that are funded with proceeds of a de-
benture issued by a premier certified development 
company unless the Administrator advises the com-
pany that loans involving a specific institutional 
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lender are to be submitted to the Administrator for 
further consideration, and approval by the Adminis-
trator. 
‘‘(2) PROGRAM GOALS.—Each premier certified 
development company shall establish a goal of proc-
essing no less than 50 percent of the applications for 
assistance under this title that the premier certified 
development company receives. Failure to meet this 
goal shall have no affect on the company’s status as 
a premier certified development company under this 
section. 
‘‘(3) SCOPE OF REVIEW.—The approval of a 
loan and guarantee of a debenture by a premier cer-
tified development company shall be subject to final 
approval as to the eligibility of any guarantee by the 
Administrator as set forth in section 506, but such 
final approval shall not include review of decisions 
by the premier certified development company in-
volving creditworthiness, loan closing, or compliance 
with legal requirements imposed by law or regula-
tion. 
‘‘(h) SUSPENSION OR REVOCATION.—The Adminis-
trator may suspend or revoke an accredited certified devel-
opment company’s premier status if the Administrator de-
termines, after a hearing on the record as set forth in sec-
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