Private Activity Bond Allocation

Federal law limits the amount of tax-exempt private activity bonds that may issued within each state and allows each state to provide by law a formula for allocating the limited amount of bonding authority among eligible bond issuers. The act eliminates the bond allocation committee that currently reviews and makes recommendations to the executive director of the department of local affairs (DOLA) regarding statewide priorities for the allocation of the limited amount of bonding authority and requires the state housing board to conduct the review and make the recommendations. The act also eliminates a cap on the amount of the direct allocation fee paid to DOLA by bond issuers that use the direct allocation of bonding authority to issue private activity bonds or that make a mortgage credit certificate election and eliminates the executive director's authority to promulgate rules to implement the statutes that govern private activity bond allocation. (Note: This summary applies to this bill as enacted.)