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7e/3 made will depend upon then-prevailing circumstances. different from the original purchase price. Such prices could be substantially CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS Article XIIIA of the California Constitution Article XIIiA of the State Constitution, also known as Proposition 13, limits the amount of ad valorem taxes on real property to 1 % of "full cash value" as determined by the county assessor. Article XIIIA defines "full cash value" to mean "the county assessor's valuation of real property as shown on the 1975-76 tax roll under 'full cash value,' or thereafter, the appraised value of real property when purchased, newly constructed or a change in ownership has occurred after the 1975 assessment period", subject to exemptions in certain circumstances of property transfer or reconstruction. The "full cash value" is subject to annual adjustment to reflect increases, not to exceed 2% per year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Article XIlIA requires a vote of two-thirds of the qualified electorate of a city, county, special district or other public agency to impose special taxes, while totally precluding the imposition of any additional ad valorem, sales or transaction tax on real property. Article XIlIA exempts from the 1 % tax limitation any taxes above that level required to pay debt service (a) on any indebtedness approved by the voters prior to July 1,1978, and (b) as a result of an amendment approved by California voters on June 3, 1986, on any bonded indebtedness approved by two-thirds of the votes cast by the voters for the acquisition or improvement of real property on or after July 1, 1978. In addition, Article XIIiA requires the approval of two-thirds of all members of the State legislature to change any State taxes for the purpose of increasing tax revenues. The above discussion of Article XIiIA does not imply that the Bonds are payable from taxes; it is presented only to demonstrate that the Gross Revenues are not subject to any of the provisions of Article XIIiA and to describe a prime example of the power of the voters of California to dramatically impact matters relating to government finance through the initiative process. Article XIIIB of the California Constitution Article XIiIS of the State Constitution, as amended by Proposition 111 approved by the voters on June 5, 1990, limits the annual appropriations of the State and of any city, county, school district, authority or other political subdivision of the State to the level of appropriations of the particular governmental entity for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the governmental entity. The "base year" for establishing such appropriation limit was originally the 1978-79 fiscal year. Following the approval of Proposition 111, for fiscal years beginning on or after July 1, 1990, the appropriations limit of each entity of government will be the appropriations limit for the 1986-87 fiscal year adjusted for the changes made from that fiscal year under the provisions of Article XIIIB, as amended by Proposition 111. Appropriations subject to Article XIIIB generally include the proceeds of taxes levied by the State or other entity of local government, exclusive of certain State subventions, refunds of 38