After voters passed Prop 26 in 2010 requiring any bill that might cause even one person to have a tax increase, any conformity bill needs a 2/3 vote of the legislature. That is not easy to get because a good number of Republican legislators have signed the no tax increase pledge. However, this year, there is a 2/3 majority of Democrats in the Assembly and Senate so a conformity bill is more achievable.
Prop 26 also required that any bill passed in 2010 that would have needed a 2/3 vote be re-voted within the year. That likely included California's last conformity bill (SB 401) that was enacted with a simple majority in April 2010. That bill, which conformed much of California tax law to the Internal Revenue Code at 1/1/09, was not re-voted. Did it need to be?
BNA Bloomberg asked me some questions about that for a guest post on their State Tax Blog recently. In digging into the precise language change to the Constitution by Prop 26, I found that the answer is not that clear. You can read more on that in their 1/22/13 post - here.
What do you think? Is SB 401 still in effect? What would be a better way for conformity without running a risk that federal changes would bust the California budget?