(a) In the event of default in payment of the principal of or interest on bonds or other obligations held in the respective retirement funds, if the issuer of the obligations is a state-supported institution of higher learning, a county, a municipal corporation, including boards, commissions, or other authorities thereof, or a school district, the Treasurer of State shall withhold the amount of the default from any moneys in the State Treasury derived from general revenues on hand to the credit of, or held for the benefit of, the issuer and credit that amount, by transfer, to the retirement fund holding the obligations.
(b)
(1) The State Treasury fund from which any transfer may be made shall be charged with the amount of the transfer.
(2)
(A) The Treasurer of State shall furnish notification of the transfer, in writing, to the disbursing officer of the fund from which the transfer shall have been made.
(B) Notification shall set forth the name of the issuer, the date, amount, and purpose of the charge.
(3) The Treasurer of State shall thereafter cancel and deliver the obligations so retired to the designated paying agent.
(c) No transfers may be made from moneys in any State Treasury fund which are derived from revenue either specifically or generally pledged to the payment of any issued and outstanding bonds.