(a) Commencing September 29, 1979, the effective date of Stats. 1979, Ch. 1168, the initial adjusted rate of interest shall be 11 percent per annum.

(b) Thereafter, the Controller shall establish an adjusted rate of interest not later than October 15 of any year if the adjusted prime rate charged by banks (that being 90 percent of the average predominate rate quoted by commercial banks to large businesses, as determined by the Board of Governors of the Federal Reserve System) during September of that year, rounded to the nearest full percent, is at least a full percentage point more or less than the adjusted rate of interest which is then in effect. Any such adjusted rate of interest shall be equal to the adjusted prime rate charged by banks, rounded to the nearest full percent, and shall become effective on February 1 of the immediately succeeding year. Any adjustment provided for under this subsection may not be made prior to the expiration of 23 months following the date of any preceding adjustment under this subsection which changes the rate of interest.

(c) Any annual installment which is not paid on the date prescribed for payment shall thereafter bear interest at the rate of 12 percent per annum.