Mich. Comp. Laws § 141.477
The state treasurer may withhold from a county and a county may assign a distribution to offset what that county owes for outstanding obligations for services rendered before March 1, 1984 under the resident county hospitalization program, the community mental health shared management and state institutions programs, or the state ward charge-back program or for the repayment of principal and interest, if any, on a loan made to the county under the emergency municipal loan act, Act No. 243 of the Public Acts of 1980, being sections 141.931 to 141.942 of the Michigan Compiled Laws, or on a bond issue under the fiscal stabilization act, Act No. 80 of the Public Acts of 1981, being sections 141.1001 to 141.1011 of the Michigan Compiled Laws.
MCL 141.477