(a) All loans shall bear an interest rate comparable to the prevailing market interest rate statewide for tax anticipation notes purchased by major California banks, as determined by the board. The interest on such loans shall accrue until final payment.
(b) Any such loan constitutes a lien and charge against the taxes, revenues, and other income not obligated by law collected during the fiscal year in which it was borrowed. The loan shall be repaid into the General Fund from the money received by the local agency from the taxes, revenues, and income as it becomes available. At a minimum, 50 percent of the principal and interest shall be repaid by December 31, 1978, and the remaining principal and interest shall be repaid by May 31, 1979. If such loan is not repaid, the board shall request the State Controller to offset the amount not repaid against any payments required by law to be made by the state to the defaulting local agency. If the total of such payments is less than the amount owed to the state, the state may exercise its lien rights pursuant to this section.
(c) The State Controller may audit all loan recipients.
(Added by Stats. 1978, Ch. 292.)
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