2006 New York Code - State Aid Guarantee.

 
    § 2436. State aid guarantee. 1. In the event that a municipality fails
  to make any payment of principal or interest on its municipal bonds, the
  chairman  of  the  agency  shall  certify  to  the  comptroller that the
  municipality has failed to meet its obligations. Such certificate  shall
  be  in  such  form  as the agency deems desirable, but shall include the
  exact  amount  of  interest  and  principal  required  to  satisfy   the
  municipality's obligations to the agency.
    2.  The comptroller, upon receipt of such certificate from the agency,
  shall withhold from the municipality  any  state  aid  payable  to  such
  municipality  to  the  extent  necessary to meet the certified amount of
  interest or principal and shall immediately pay over to the  agency  the
  amount so withheld.
    3.  Pending  payment  to  the  agency from the comptroller of any such
  state aid withheld from a municipality, the agency shall, if payments of
  interest or principal are due on the agency's bonds, withdraw an  amount
  sufficient  to  meet  such amounts withheld from a municipality from the
  debt service reserve fund securing such bonds. Any such amount withdrawn
  from such debt service reserve fund shall be paid into such debt service
  reserve fund upon receipt by the agency  from  the  comptroller  of  any
  state aid withheld. Any amount so paid to the agency from such state aid
  shall  not  obligate  the state to make, nor entitle the municipality to
  receive, any additional amounts of state aid.
    4. In the event that a special program municipality shall fail to make
  a payment in such amount (as calculated in accordance with  the  special
  program  agreement  to  which such municipality shall be a party) and by
  such date as is provided to be made by such municipality in its  special
  program  agreement,  the  chairman of the agency shall so certify to the
  comptroller. Such certificate shall be in such form as the agency  deems
  desirable, but shall specify the amount by which such payment shall have
  been  deficient.  The comptroller, upon receipt of such certificate from
  the agency, shall withhold from such special  program  municipality  any
  state  aid  payable  to such municipality to the extent of the amount so
  stated  in  such  certificate  as  not  having  been  made,  and   shall
  immediately  pay  over  to  the agency the amount so withheld; provided,
  however, that in the case of a special program  agreement  entered  into
  for  the purpose described in paragraph (b) or (c) or (d) of subdivision
  one of section twenty-four hundred  thirty-five-a  of  this  title,  the
  comptroller  shall  be  authorized  to withhold from the special program
  municipality such school aid as is payable to the city  school  district
  of  the  special  program  municipality,  to the extent of the amount so
  stated  in  such  certificate  as  not  having  been  made,  and   shall
  immediately pay over to the agency the amount so withheld. Any amount so
  paid  to the agency from such state and/or school aid shall not obligate
  the state to make, nor  entitle  the  special  program  municipality  to
  receive,  any  additional  amounts  of  state and/or school aid. Nothing
  contained therein shall be deemed to prevent the state  from  modifying,
  reducing  or  eliminating any program or programs of state and/or school
  aid; nor shall the state be obligated by the terms  hereof  to  maintain
  state and/or school aid at any particular level or amount.
    5.  In  the event that a special school deficit program district shall
  fail to make a payment in such amount (as calculated in accordance  with
  the  special  school  deficit  program  agreement  to  which such school
  district shall be a party) and by such date as is provided to be made by
  such school district in its special school  deficit  program  agreement,
  the  chairman  of the agency shall so certify to the comptroller, with a
  copy to the commissioner of education. Such certificate shall be in such
  form as the agency deems desirable, but  shall  specify  the  amount  by
  which  such  payment  shall  have  been deficient. The comptroller, upon
  receipt of such certificate from the agency, shall  withhold  from  such
  special  school  deficit program district any school aid payable to such
  special school deficit program district to the extent of the  amount  so
  stated   in  such  certificate  as  not  having  been  made,  and  shall
  immediately pay over to the agency the amount so withheld. Any amount so
  paid to the agency from such school aid shall not obligate the state  to
  make,  nor  entitle  the  special  school  deficit  program  district to
  receive, any additional amounts of school aid. Nothing contained therein
  shall be deemed  to  prevent  the  state  from  modifying,  reducing  or
  eliminating  any  program or programs of school aid; nor shall the state
  be obligated  by  the  terms  hereof  to  maintain  school  aid  at  any
  particular level or amount.