a. Each school district or municipality, as the case may be, which issues qualified bonds shall certify to the State Treasurer the name and address of the paying agent, and the maturity schedule, interest rate and dates of payment of debt service on such qualified bonds within 10 days after the date of issuance of such qualified bonds. After receipt of such certificate the State Treasurer shall withhold from the amount of State school aid payable to such school district or municipality an amount of such State school aid which will be sufficient to pay the debt service on such qualified bonds as the same shall mature and become due. The State Treasurer shall, on or before each principal and interest payment date, forward such withheld amounts to the paying agent for such qualified bonds for deposit to the account established with such paying agent for the purpose of paying the debt service on such qualified bonds. From the time withheld by the State Treasurer all State school aid so withheld and paid or to be paid to and held by the paying agent shall be exempt from being levied upon, taken, sequestered or applied toward paying the debts of such school district or municipality other than for payment of debt service on such qualified bonds. From the time withheld by the State Treasurer, such State school aid so withheld and paid or to be paid to said paying agent shall be deemed to be held in trust for the sole purpose of paying the debt service on such qualified bonds.

b. The State of New Jersey hereby covenants with the purchasers, holders and owners, from time to time, of qualified bonds that it will not repeal, revoke, rescind, modify or amend the provisions of subsection a. of this section so as to create any lien or charge on or pledge, assignment, diversion, withholding payment or other use of or deduction from any State school aid to be apportioned and paid to any paying agent of qualified bonds which is prior in time or superior in right to the payment required by subsection a. of this section; provided, however, that nothing herein contained shall be deemed or construed to require the State of New Jersey to continue to make payments of State school aid or to limit or prohibit the State from repealing or amending any law heretofore or hereinafter enacted for the payment or apportionment of State school aid or the manner, time, or amount thereof.

c. The certification to the State Treasurer as to amount payable in any year for debt service on such qualified bonds shall be fully conclusive as to such qualified bonds from and after the time of issuance of such qualified bonds notwithstanding an irregularity, omission or failure as to compliance with any of the provisions of this act with respect to such qualified bonds provided that such qualified bonds contain a recital to the effect that they are entitled to the benefits of the provisions of this act. All persons shall be forever estopped from denying that such qualified bonds are entitled to the benefits of the provisions of this act.

L.1976, c. 39, s. 8, eff. June 28, 1976.