(a) In the event of a failure of any local government to collect and remit in full all amounts due which involve the credit or guarantee of the state or the authority, it shall be the duty of the state treasurer or the duty of the authority to withhold all funds of the state and all funds administered by the state, its agencies, boards, and instrumentalities or all funds of the authority allotted to such local government until such local government has collected and remitted in full all sums due and cured or remedied all defaults, unless such amounts have been waived pursuant to this article.
(b) Nothing contained in this Code section shall mandate the withholding of funds allocated to a local government which would violate contracts to which the state or the authority is a party, the requirements of federal law imposed on the state or the authority, or judgments of any court binding the state or the authority.
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