Alaska Stat. § 37.15.575
If a municipality is in default on the payment of principal or interest on a loan from the Alaska clean water fund (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036), the committee may provide written notice of default to any state agency that is the custodian of money that is payable to the municipality. If the committee determines to provide notice, a separate written notice shall be given in each instance of default. Notwithstanding any other provision of law, at any time after receipt of written notice of default, the agency head shall withhold payment of the money from the municipality. The agency head shall pay over the withheld money to the committee for deposit in the Alaska clean water fund or the Alaska drinking water fund, as appropriate, for the purpose of paying or securing the principal and interest on the loan.
AS 37.15.575