The talk of California tax practitioners over the last week has been all about the legislature’s passage of AB 102. This may be surprising to those who read the bill when it was introduced on January 10 of this year, for the bill consisted of one sentence:
It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2017.
The Assembly passed this obscurantist bill and sent it to the state Senate on May 18. Then, on June 12, the Senate gutted and amended the bill. As amended, the bill transfers the responsibilities of the State Board of Equalization to a newly created Department of Tax and Fee Administration, which will be located within the Government Operations Agency. The existing Board of Equalization has responsibility for four general areas: sales and use taxes, property taxes, special taxes and the tax appellate program. It is the country’s only elected tax commission. AB 102 also transfers the Board of Equalization’s responsibilities for tax appeals to a newly created Office of Tax Appeals. The Government Operations Agency and the Office of Tax Appeals are to be overseen by directors appointed by the Governor. The Board of Equalization, which is established by Article XII, Section 17 of the California Constitution, will remain in existence but with its authority reduced to those prescribed in the Constitution.One day after the bill was amended to make these sweeping changes, it was considered by the one and only committee in either house. It is therefore not surprising that there was no registered support or opposition. Two days later, the Senate sent the bill back to the Assembly for concurrence. On that same day – June 15 – the Assembly concurred in the Senate’s amendments, even though the Assembly’s rules did not permit the bill to be acted on until June 17. Standing Rules of the Assembly, Rule 77.
The Governor still must sign AB 102, but this appears likely as he has reportedly supported changes to the Board of Equalization. Regardless of the merits of these changes, it is obnoxious to see these changes rushed through the legislature and made effective immediately through the pretense of including them as an appropriations bill. See Cal. Const. Art. IV, Section 12(e)(4).