1. (a) A State unit authorized to issue bonds may issue and sell bond anticipation notes if, in the resolution that authorizes the notes, the State unit covenants to:

   1. (1) pay from the proceeds of the bonds in anticipation of the sale of which the notes are issued:

      1. (i) the principal of the notes; and
      2. (ii) to the extent that the interest on the notes is not paid from the proceeds of sale of the notes, the interest on the notes; and
   2. (2) issue the bonds as soon as there is no longer a reason for deferring their issuance.

2. (b) A State unit may issue and sell grant anticipation notes in anticipation of the receipt of a grant from the United States, the State, or any of their units if, in the resolution that authorizes the notes, the State unit covenants to pay from the proceeds of the grant in anticipation of the receipt of which the notes are issued:

   1. (1) the principal of the notes; and
   2. (2) the interest on the notes.

Added by Acts 1985, c. 11, § 2, eff. Oct. 1, 1985.