(a) The state ceiling for calendar year 1989 and thereafter is hereby allocated in its entirety to the state, and no other governmental unit, issuer, or other entity of any type shall have or utilize any portion of the state ceiling for such year except in accordance with this division. The state ceiling for calendar year 1989 and thereafter shall be redistributed by the authority to issuers of affected bonds in the chronological order of receipt of completed applications, subject to the limitations, reservations and further provisions of this subsection.

(1) There is hereby reserved for Alabama Housing Finance Authority 25 percent of the state ceiling for each calendar year, to be used for the issuance of exempt facility bonds for qualified residential rental projects and for the issuance of qualified mortgage bonds, in such relative principal amounts as shall be determined by the Board of Directors of Alabama Housing Finance Authority. The reservation of state ceiling hereby granted to Alabama Housing Finance Authority shall extend until December 24 of each calendar year. Any portion thereof which shall be voluntarily released by Alabama Housing Finance Authority in favor of the authority or which shall remain unused as of 5:00 P.M., Central Standard Time, on December 24, shall revert to the authority and shall be available for reallocation under subdivision (a)(5) below. If, during any calendar year, the provisions of the code as then in effect shall not provide an exclusion from gross income for interest on bonds or other obligations issued by Alabama Housing Finance Authority, the reservation contained in this subdivision (a)(1) shall revert to the authority and shall be subject to allocation by the authority under subdivision (5) below.

(2) There is hereby reserved for Alabama Higher Education Loan Corporation 10 percent of the state ceiling for each calendar year, to be used for the issuance of qualified student loan bonds. The reservation of state ceiling hereby granted to Alabama Higher Education Loan Corporation shall extend until December 24 of each calendar year. Any portion thereof which shall be voluntarily released by Alabama Higher Education Loan Corporation in favor of the authority or which shall remain unused as of 5:00 P.M., Central Standard Time, on December 24 shall revert to the authority and shall be available for reallocation under subdivision (a)(5) below. If, during any calendar year, the provisions of the code as then in effect shall not provide an exclusion from gross income for interest on bonds or other obligations issued by Alabama Higher Education Loan Corporation, the reservation contained in this subdivision (a)(2) shall revert to the authority and shall be subject to allocation by the authority under subdivision (5) below.

(3) Subject to the provisions of subdivision (a)(6) below, 35 percent of the state ceiling for each calendar year is hereby reserved for issuers of qualified small issue bonds which are issued to finance manufacturing facilities.

(4) Subject to the provisions of subdivision (a)(6) below, 15 percent of the state ceiling for each calendar year is hereby reserved for issuers of exempt facility bonds.

(5) Subject to the duty of fairness and impartiality set forth in Section 41-10-40, the remaining 15 percent of the state ceiling for each calendar year not provided for in subdivisions (1), (2), (3) and (4) above, together with any amounts which shall revert to the authority under Section 41-10-37(6) or subdivisions (1) and (2) above, is hereby reserved for the authority, to be allocated to issuers of affected bonds in the discretion of the authority.

(6) Subject to the duty of fairness and impartiality set forth in Section 41-10-40, should the authority determine that inefficient use has been or is being made of the reservations contained in subdivisions (2), (3) and (4) above, or should the authority determine for any other reason that such reservations are inappropriate, the authority may, from time to time, reallocate all or any part of such reservations in accordance with subdivision (5) above.

(b) The Legislature has found and determined that the method for allocating the state ceiling contained in Section 146 of the code, as applicable to the state immediately prior to September 27, 1988, including particularly the provisions therein requiring that one-half of the state ceiling be distributed among local issuers on the basis of population, does not permit the full utilization of the state ceiling. In many instances, the amount of state ceiling available to local issuers under the provisions of the code are inadequate to permit the issuance of affected bonds in the principal amounts needed. In order to promote the complete and efficient utilization of the state ceiling available for use in calendar year 1988 as of September 27, 1988, the following provisions shall be applicable to affected bonds issued on or after September 27, 1988:

(1) The remaining state ceiling for calendar year 1988 is hereby allocated in its entirety to the state, and from and after September 27, 1988, no other governmental unit, issuer or other entity of any type shall have or utilize any portion of the remaining state ceiling for such year except in accordance with this division. The remaining state ceiling shall be allocated during calendar year 1988, in the discretion of the authority, to issuers of affected bonds upon receipt of completed applications subject to the further provisions of this subsection (b).

(2) The authority shall take all necessary and appropriate steps to determine the amount of the remaining state ceiling as soon as practicable after the passage of this division. In order to assist the authority in such determination, each county, municipality and other local issuer in the state shall be required to report to the authority such information as the authority may request with respect to the principal amount of affected bonds issued by such entities during calendar year 1988 and prior to September 27, 1988. The authority shall also review the records of the Alabama Securities Commission maintained under Article 5 of Chapter 6 of Title 8 as a further means of determining the amount of state ceiling heretofore used by local issuers in calendar year 1988 otherwise than pursuant to the provisions of Executive Order No. 22.