Whenever it is established as herein provided that a regional school district, including Regional School District Number 1 of Litchfield County, has defaulted in the payment of the principal or interest, or both, on its bonds or notes, the payment of state aid and assistance to such regional school district pursuant to any statute then in existence shall be withheld by the state. If a holder or owner of any such bond or note of such regional school district files with the State Comptroller a verified statement describing such bond or note and alleging default in the payment thereof or the interest thereon, or both, the Comptroller shall immediately investigate the circumstances of the alleged default, prepare and file in his office a certificate setting forth his finding with respect there
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Whenever it is established as herein provided that a regional school district, including Regional School District Number 1 of Litchfield County, has defaulted in the payment of the principal or interest, or both, on its bonds or notes, the payment of state aid and assistance to such regional school district pursuant to any statute then in existence shall be withheld by the state. If a holder or owner of any such bond or note of such regional school district files with the State Comptroller a verified statement describing such bond or note and alleging default in the payment thereof or the interest thereon, or both, the Comptroller shall immediately investigate the circumstances of the alleged default, prepare and file in his office a certificate setting forth his finding with respect thereto and serve a copy of such finding, by registered or certified mail, upon the treasurer or chief fiscal officer of such regional school district. Such investigation shall cover the current status with respect to the payment of principal of and interest on all outstanding bonds and notes of such regional school district, and the statement prepared and filed by the Comptroller pursuant to this section shall set forth a description of all bonds and notes of such regional school district found to be in default and the amount of principal and interest thereon past due. Upon the filing of such a certificate in the office of the Comptroller, the Comptroller shall thereafter deduct and withhold from the next succeeding payment of state aid or assistance otherwise due such regional school district such amount as is necessary to pay the principal of and interest on such bonds and notes of such regional school district then in default. If such amount is insufficient to pay all of such principal and interest, said Comptroller shall similarly deduct and withhold from the next succeeding payment of state aid and assistance, otherwise due to any town in such district which is currently in default of its annual payments to such district, such amount as is necessary to pay the principal of and interest on such bonds or notes remaining in default. If all such amounts withheld are insufficient to pay all such principal and interest, the Comptroller shall similarly deduct and withhold from each succeeding payment of state aid or assistance otherwise due such regional school district and such towns such amount or amounts thereof as may be required to pay all of the principal of and interest on such bonds and notes then in default. Payments of state aid or assistance so deducted and withheld shall be forwarded promptly by the Comptroller to the paying agent or agents for the bonds and notes in default for the sole purpose of payment of defaulted principal of and interest on such bonds or notes; provided, if any such payment of state aid or assistance so deducted or withheld is less than the total amount of all principal and interest on such bonds and notes, then the Comptroller shall forward to each paying agent an amount in the proportion that the amount of such bonds and notes in default payable by such paying agent bears to the total amount of the principal of and interest then in default on such bonds and notes of such regional school district. The Comptroller shall promptly notify the treasurer or the chief fiscal officer of such regional school district of any payment or payments made to any paying agent or paying agents of defaulted bonds or notes pursuant to this section. The state of Connecticut hereby covenants with the purchasers, holders and owners from time to time of bonds and notes issued by regional school districts for school purposes that it will not repeal the provisions of this section or amend or modify the same so as to limit or impair the rights and remedies granted hereby; provided nothing herein contained shall be deemed or construed as requiring the state to continue the payment of state aid or assistance to any regional school district or town or as limiting or prohibiting the state from repealing or amending any law relating to state aid or assistance, the manner and time of payment or apportionment thereof, or the amount thereof.