The "Jarvis/Gann" initiative approved by California voters in 1978 which added Article XIII A to the State Constitution and drastically limited the use of ad valorem property taxes to fund government activities.
A tax limitation initiative approved by the voters in 1978 which provided for (1) a 1% property tax limit (tax rates to repay existing voter-approved bonded indebtedness are excluded from the limit),(2) assessment restrictions establishing 1975 level values for all property, with an allowable increase of 2% annually and reappraisal to current value upon change in ownership and new construction,(3) a two-thirds vote of the electorate for local agencies to impose "special taxes".
Limits the property tax rate to 1 percent plus voter-approved bonded indebtedness, and defines taxable value as the lower of the property's Factored Base Year Value (FBYV) or market value on lien date, January 1. Factored Base Year Value is the market value of the property when it was acquired by the current owner, plus the value of any new construction, plus an inflation factor of no more than 2% per year. Taxable value can increase more than 2% in one year if the property experiences a change in ownership, new construction or received temporary reduction(s) in taxable value in prior tax year(s).