California legislators may vote as soon as today on a proposal to shake up the State Board of Equalization.

Reforming the Board is long overdue. The structure to accomplish this as outlined in budget trailer bills may be sound or faulty, but for now, only three things are clear:

  1. Rushing a major reorganization through the budget gauntlet is fraught: it limits debate over both the big issues and the details. The resulting organization and process inevitably will be flawed or worse.
  2. Expecting a well-functioning transition in only two weeks is foolish. Prepare for the “Chaos at New Office of Tax Appeals” articles in mid-summer.
  3. The bill is unconstitutional.

The first two points have been touched on by others, herehere and here.

But the constitutional infirmity should persuade lawmakers to take a breath and give the proposal deeper consideration.

Section 8(d) of Article IV of the California Constitution prohibits the Legislature from creating or abolishing any office with urgency legislation. It reads:

Urgency statutes are those necessary for immediate preservation of the public peace, health, or safety. A statement of facts constituting the necessity shall be set forth in one section of the bill. In each house the section and the bill shall be passed separately, each by rollcall vote entered in the journal, two thirds of the membership concurring. An urgency statute may not create or abolish any office or change the salary, term, or duties of any office, or grant any franchise or special privilege, or create any vested right or interest (emphasis added).

The BOE legislation creates at least two new offices, an Office of Tax Appeals and Department of Tax and Fee Administration.

While budget trailer bills are not denoted as urgency bills, they are de facto urgency bills. Prior to 2010, the budget bill required a two-thirds vote, and any related budget implementation bills that needed to take effect immediately required a two-thirds vote, as an urgency bill.

When the voters adopted Proposition 25 in 2010, they reduced the vote requirement for the state budget and any budget implementation bills to majority approval, yet retained the immediate effective date for these bills. Without designating them explicitly as “urgency bills,” the voters gave them the essential characteristics of an urgency bill: that they take effect immediately and include a statement of facts as to why the bill should be adopted immediately.

If the BOE reform bills creating new offices passes in an immediately-effective budget trailer bill, then the statute is vulnerable to a constitutional challenge, placing the offices and any of their decisions in jeopardy.

These shortcomings can be solved by using the traditional, deliberative legislative process that includes committee hearings that discover information and hear from witnesses. And for those who are skeptical that this kind of reform can only be accomplished through a hurry-up, keep-moving-there’s-nothing-to-see-here process, note that legislators accomplished major reforms of the Public Utilities Commission using the normal process just last year.

Another alternative is the Governor’s Reorganization authority, used extensively by Governor Brown during his prior term. Each of these options is more transparent and legally sound than the current slapdash approach.