Section 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.