Whenever the General Assembly has enacted legislation pursuant to Article X, Section 9 (b), (c), or (d) of the Constitution of Virginia authorizing the issuance of bonds for capital projects of the Commonwealth or any state agency, institution, board, or authority (a "state instrumentality") where debt service payments on the bonds are expected to be made in whole or in part from appropriations of the Commonwealth, the Board, with the consent of the Governor, may borrow money in anticipation of the issuance of the bonds to provide funds, with any other available funds, to pay the costs of acquiring, constructing, renovating, enlarging, improving, and equipping any one or more of the capital projects for which such bonds have been authorized. Any such borrowing shall be evidenced by notes of the Commonwealth that shall be in such form, shall be executed in such manner, shall bear interest at such rates, either at fixed rates or at rates established by formula or other method, and may contain such other provisions, all as the Board, or the State Treasurer when authorized by the Board, may determine. Such notes may bear interest at a rate subject to inclusion in gross income for federal income tax purposes as determined by the Board, with the consent of the Governor. Such notes may be made payable from the proceeds of the bonds, other notes, or other sources of funds authorized by the General Assembly. The proceeds of the notes, to the extent not required to pay the principal or interest on maturing notes, or expenses associated therewith, shall be paid or otherwise made available to the Commonwealth or appropriate state instrumentality to pay the costs of such capital projects. However, the undertaking and obligation of (i) the Board to make such note proceeds available to the state instrumentality and (ii) the state instrumentality to pay or provide for the payment of the interest and principal coming due on the notes and to issue its own bonds or otherwise retire the notes within five years of the date of their initial issuance shall be set forth in a written agreement between the Board and the state instrumentality. No such notes shall be issued by the Board for or on behalf of a state instrumentality unless the Board first determines that such written agreement provides reasonable assurance of the full and timely payment of the debt service on the notes.

No law authorizing the issuance of bonds and notes for which bond anticipation notes have been issued by the Board shall be repealed or otherwise vitiated without first providing for the payment of the related bond anticipation notes of the Board.

1991, c. 554, § 2.1-179.3; 1996, cc. 636, 656; 2001, c. 844.