Any state funds that were distributed to a locality, including a local school board, in support of a governmental program or function prior to a consolidation of such program or function or the governmental consolidation of the entities providing such programs or functions, shall continue to be distributed to the entity or entities carrying out the program or function after consolidation in accordance with the following schedule:
This section shall not prohibit the Commonwealth from terminating or modifying any program or function under which distribution to a locality, including a local school board, has been made, and if so terminated or modified all obligations hereunder shall cease or be reduced in proportion with such modifications, as the case may be.
If any such consolidations terminate prior to the end of the applicable period set forth above, the Commonwealth's obligation under this section shall cease.
For the purposes of this section, "consolidation" includes the transition of a city to town status.
The provisions of this section shall also apply to consolidations of a governmental program or function and governmental consolidations of entities, providing such consolidations take place after January 1, 1995.
Va. Code § 15.2-1302