N.Y. State Finance Law § 99: Withholding of state assistance upon default in payment of bonds held by the state

§ 99. Withholding of state assistance upon default in payment of bonds

held by the state. When any municipality shall be in default for a

period of more than six months on account of principal of its bonds or

on account of interest on such bonds, or on account of both such

principal and interest, and such bonds shall have been owned for not

less than two years by the state or by the state comptroller in trust,

or for the benefit of the New York state employees' retirement system or

of any fund of the state the allotment, apportionment and payment of

state assistance pursuant to the provisions of article four-A of this

chapter or of section one hundred twelve of the highway law to any such

municipality shall be withheld by the state comptroller in the following

manner. At the time of remittance of any installment or quarterly

payment of such state assistance the comptroller shall withhold payment

of installments or quarterly payments of such state assistance to such

municipality until the indebtedness due from such municipality to the

state or to the state comptroller as trustee or for the benefit of the

New York state employees' retirement system or of any fund of the state

shall be paid in full or until the installments or quarterly payments of

such state assistance or portions thereof so withheld shall equal the

amount so due from the municipality.