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• The California State Treasurer's Office Internet home page at www.treasurer.ca.gov, under the heading "Financial Information ", posts the State's audited financial statements. In addition, the Financial Information section includes the State's Rule 15c2 -12 filings for State bond issues. The Financial Information section also includes the "Overview of the State Economy and Government, State Finances, State Indebtedness, Litigation" from the State's most current reoffering circular, dated as of r which discusses the State budget and its impact on local agencies in the State. • The California Department of Finance's Internet home page at www.dof.ca.gov, under the heading "California Budget ", includes the text of proposed and adopted State Budgets. • The State Legislative Analyst's Office ( "LAO ") prepares analyses of the proposed and adopted State budgets. The analyses are accessible on the Legislative Analyst's Internet home page at www.lao.ca.gov under the heading "Products." The State has not entered into any contractual commitment with the City or the owners of the Bonds to provide State budget information to the City or the owners of the Bonds. Although the City believes the State sources of information listed above are reliable, the City assumes not responsibility for the accuracy of the State budget information set forth or referred to herein. State Budget and its Impact on the City. The following information concerning State Budgets and potential impacts on the City have been obtained from publicly available information from the State Department of Finance, the State Treasurer and the California Legislative Analyst Office websites. The estimates and projections provided below are based upon various assumptions, which may be affected by numerous factors, including future economic conditions in the State and the nation, and there can be no assurance that the estimates will be achieved. For further information and discussion of factors underlying the State's projections, see the aforementioned websites. The City and the Underwriters believe such information to be reliable, however, none of the City or the Underwriters take any responsibility as to the accuracy or completeness thereof and none have independently verified such information. Adoption of Annual State Budget According to the State Constitution, the Governor of the State (the "Governor ") must propose a budget to the State Legislature no later than January 10 of each year. Under an initiative constitutional amendment approved by the State's voters on November 2, 2010 as "Proposition 25 ", a final budget (the "State Budget ") must be adopted by a majority vote of each house of the Legislature no later than June 15, although this deadline has been routinely breached in the past. Any tax increase provision of such final budget shall continue to require approval by a two - thirds majority vote of each house of the State Legislature. The budget becomes law upon the signature of the Governor, who may veto specific line items of expenditure. When the State Budget is not adopted on time, portions of each city's and local agency's State funding are affected differently. Under the rule of White v. Davis (also referred to as Jarvis v. Conneln, a State Court of Appeal decision reached in 2002, funds for State programs cannot be disbursed by the State Controller until that time unless the expenditure is (i) authorized by a continuing appropriation found in statute, (ii) mandated by the Constitution (such as appropriations for salaries of elected state officers), or (iii) mandated by federal law (such as payments to State workers at no more than minimum wage). The State Controller has posted guidance as to what can and cannot be paid during a budget impasse at its website: www.sco.ca.gov. Should the Legislature fail to pass the budget or emergency appropriation 19