The Controller shall make the deduction provided by Section 16080 during each fiscal year, as herein provided, until the principal amount of the apportionment made and disbursed to the district for the grade level, and all accrued interest due thereon, has been withheld; but no interest shall accrue, or become due and payable, to the state with respect to the principal amount of the apportionment, or any portion thereof, for any period of time following the expiration of 25 years after the first day of July of the fiscal year next succeeding the fiscal year in which the apportionment becomes final. At the expiration of 30 years from the first day of July of the fiscal year next succeeding the fiscal year in which the apportionment became final, the unpaid balance of the principal amount of the apportionment disbursed to the district, including all interest included in the principal amount as provided in Section 16088, shall be canceled on the books of the Controller; and the state shall have no further right to the repayment of the unpaid balance. Notwithstanding the provisions of this section, that portion of the “annual repayment,” if any, computed by the Controller under Section 16075 prior to the date of cancellation of the principal amount of an apportionment under this section, which has not been withheld by the Controller, as provided by Section 16080, prior to the date of the cancellation, shall be withheld by the Controller, as provided by Section 16080, subsequent to the effective date of the cancellation; and the amount so withheld shall be credited to the school district in determining the principal amount of the apportionment, including all interest included therein, which is canceled under the provisions hereof. The grade level shall be excluded from any computations provided under Sections 16070, 16071, 16072, 16074, and 16075, in making the computations, after the effective date of the cancellation, to determine the “annual repayment,” if any, that may thereafter be due the state from the school district with respect to other grade levels thereof.

(Repealed and added by Stats. 1996, Ch. 277, Sec. 2. Effective January 1, 1997. Operative January 1, 1998.)