* § 5. Statewide bond reserve. One-third of the statewide ceiling is
hereby set aside as a statewide bond reserve to be administered by the
director.

1. Allocation of the statewide bond reserve among state agencies,
local agencies and other issuers. The director shall transfer a portion
of the statewide bond reserve to the commissioner for allocation to and
use by local agencies and other issuers in accordance with the terms of
this section. The remainder of the statewide bond reserve may be
allocated by the director to state agencies in accordance with the terms
of this section.

2. Allocation of statewide bond reserve to local agencies or other
issuers.

a. Local agencies or other issuers may at any time apply to the
commissioner for an allocation from the statewide bond reserve. Such
application shall demonstrate:

(i) that the requested allocation is required under the code for the
interest earned on the bonds to be excluded from the gross income of
bondholders for federal income tax purposes;

(ii) that the local agency's remaining unused allocation provided
pursuant to section three of this act, and other issuer's remaining
unused allocation, or any available carryforward will be insufficient
for the specific project or projects for which the reserve allocation is
requested; and

(iii) that, except for those allocations made pursuant to section
eleven of this act to enable carryforward elections, the requested
allocation is reasonably expected to be used during the calendar year.

b. In reviewing and approving or disapproving applications, the
commissioner shall exercise discretion to ensure an equitable
distribution of allocations from the statewide bond reserve to local
agencies and other issuers. Prior to making a determination on such
applications, the commissioner shall notify and seek the recommendation
of the commissioner of housing and community renewal in the case of an
application related to the issuance of multi-family housing or mortgage
revenue bonds, and in the case of other requests, such state officers,
departments, divisions and agencies as the commissioner deems
appropriate.

c. Applications for allocations shall be made in such form and contain
such information and reports as the commissioner shall require.

3. Allocation of statewide bond reserve to state agencies. The
director may make an allocation from the statewide bond reserve to any
state agency. Before making any allocation of statewide bond reserve to
state agencies the director shall be satisfied:

a. that the allocation is required under the code for the interest
earned on the bonds to be excluded from the gross income of bondholders
for federal income tax purposes;

b. that the state agency's remaining unused allocation provided
pursuant to section four of this act or any available carryforward will
be insufficient to accommodate the specific bond issue or issues for
which the reserve allocation is requested; and

c. that, except for those allocations made pursuant to section eleven
of this act to enable carryforward elections, the requested allocation
is reasonably expected to be used during the calendar year.
* NB Repealed January 1, 1991