(a) Application by agency.--An agency may apply to the department for an allocation for a project to be undertaken by the agency consistent with the purposes set forth in section 2701.¹ The department, in consultation with the agency and the Secretary of the Budget, shall determine what portion of an allocation request the agency will receive and may establish deadlines for the use of the allocation. A decision on the application shall be provided by the department within 30 days from the date that the application for an allocation is made to the department. Nothing in this chapter shall prevent an agency from applying for additional allocations for projects throughout the year. Nothing in this chapter shall affect the rights of constitutional home rule cities to receive allocations under section 146(e)(3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 146(e)(3)).

(b) Application by qualified local issuers.--A qualified local issuer may apply to the department for an allocation for a project consistent with purposes set forth in section 2701 with respect to which the qualified local issuers are authorized by the laws of the Commonwealth to issue a tax-exempt bond. Except as set forth in subsection (d.1), a qualified local issuer shall apply directly to the department, and the department shall determine what portion of an allocation request a qualified local issuer will receive.

(c) Recapture of unused allocation.--A portion of an allocation provided under subsection (a), (b) or (d.1) which is not used before the earlier of the end of the calendar year or the deadline set by the department under subsection (a), including an extension by the department, shall be recaptured for reallocation by the department in consultation with the Secretary of the Budget.

(d) Allocations to Pennsylvania Housing Finance Agency.--As provided by section 501-A.1 of the act of December 3, 1959 (P.L. 1688, No. 621),² known as the Housing Finance Agency Law, an allocation for a mortgage revenue bond shall only be made by the department to the Pennsylvania Housing Finance Agency, which may reallocate a mortgage revenue bond under the Housing Finance Agency Law. The department may make an allocation for a qualified multifamily residential facility to the Pennsylvania Housing Finance Agency, the Pennsylvania Economic Development Financing Authority or a qualified local issuer. An allocation for a qualified multifamily residential facility made to the Pennsylvania Housing Finance Agency may be reallocated in whole or in part by the Pennsylvania Housing Finance Agency to a qualified local issuer.

(d.1) First-time farmers.--An allocation for first-time farmer projects shall be made by the department to the Department of Agriculture, which may reallocate to qualified local issuers. A qualified local issuer must apply directly to the Department of Agriculture, and the Department of Agriculture shall determine what portion of an allocation request a qualified local issuer shall receive. The Department of Agriculture has the authority to establish by regulation the criteria under which a qualified local issuer may receive allocation for a first-time farmer project. The criteria must be consistent with Federal law. By June 30 and December 31 of each year, the Department of Agriculture shall provide information to the department on allocations provided to qualified local issuers for first-time farmer projects, consistent with the information set forth in section 2706(a)(2).³

(e) Carryforward of unused authority.--The department shall provide for the carryforward of any unused tax-exempt bond authority at the close of a year in a manner the department determines will best preserve the ability to use the allocation to carry out the purposes of this chapter. In providing for the carryforward, there shall be a presumption that ability to carry out the purposes of this chapter will be best maintained if carryforwards of unused tax-exempt bond authority are reserved for agencies.