1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JANUARY 21, 2015 9 10 PUBLIC COMMENT 11 12 13 14 15 16 17 18 19 Reported by: Juli Price Jackson 20 No. CSR 5214 21 22 23 24 25 26 27 28 1 1 P R E S E N T 2 3 For the Board Fiona Ma, CPA of Equalization: Member 4 5 Diane L. Harkey Member 6 7 Yvette Stowers Appearing for Betty Yee, 8 State Controller (per Government Code 9 Section 7.9) 10 Joann Richmond 11 Chief, Board Proceedings Division 12 13 14 ---oOo--- 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 1 INDEX OF SPEAKERS 2 ---o0o--- 3 NAME PAGE 4 5 Rick Powers 5 6 Michael Warnken 8 7 Bill Connell 11 8 ---o0o--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JANUARY 21, 2015 4 ---oOo--- 5 MS. MA: Is the microphone on? Oh, here we 6 are. 7 Okay, good morning. New faces up here -- 8 all new faces, actually. 9 We do have a quorum. So, we are going to 10 start the meeting. Appreciate you all for coming 11 out today. 12 I know we all look forward to serving all 13 of you for the next four years and look forward to 14 getting to know all of you better and working with 15 everyone. 16 So, we are going to open with the Pledge of 17 Allegiance. I know it is unusual, but I think it's 18 important. 19 And we are going to open with the Pledge of 20 Allegiance. 21 And I would like to ask Mr. Connell to 22 please lead us in the pledge. 23 MR. CONNELL: Good morning. Would you all 24 please join me? 25 (Pledge of Allegiance Recited.) 26 MS. MA: Thank you, Mr. Connell. 27 We also have a few members from the public 28 who signed up early to speak at the beginning of our 4 1 session here today. 2 We will hear from Mr. Rick Powers, 3 Mr. Michael Warnken and Mr. William Connell. 4 If you would please approach. 5 ---o0o--- 6 RICK POWERS 7 ---o0o--- 8 MR. POWERS: Good morning. Do I turn this 9 on here, the microphone? 10 MS. MA: I think it's on. 11 MR. POWERS: Okay. This is my third time 12 before the Board regarding 16102 of the Business and 13 Professions Code, that's now in the -- mentioned in 14 919, SB 919, that Mr. Connell was -- put all that 15 effort into. 16 So, I am agreeing that I feel like there is 17 a war against veterans in the State Board of 18 Equalization regarding the benefits that were 19 written into this act back in 1941. 20 I know it's not in the sales and use tax, 21 but it needs to be inserted because there's only a 22 few people that this affects. 23 I had a brother that -- that was a part of 24 the Navy dive team that when -- when an A6 crashed 25 into the San Francisco Bay, there was jet fuel 26 leaking from the -- the jet. They rapidly went in 27 and extracted the A6 Intruder in 1994. 28 My brother tasted the jet fuel he told me. 5 1 His voice started to change. The jet fuel covered 2 his entire body. 3 I was unable to go to his funeral because 4 of this ignorance of this law and the continued 5 defiance of this law by the State. 6 I -- my business with the Grateful Dead was 7 completely destroyed because they thought I brought 8 about the -- the audits because of royalties. 9 And the royalties were actually thrown out 10 by the California Supreme Court in People versus 11 Preston. 12 But it contributed to the fact that I was 13 unable to go to his funeral. This was a wrong thing 14 that the State did. And I basically did not get to 15 see the people that I wanted to see at his funeral 16 because they're all gone now. These are all World 17 War II veterans. 18 I have this elephant here, which I refer to 19 as the elephant in the room, which I drew, that has 20 not been seen by the public since I was put out of 21 business by the State Board. 22 My First Amendment rights were also taken 23 away when I lost my business because I was unable to 24 sell any longer. 25 So, I just think that there must be a 26 concerted effort to help veterans help themselves. 27 This isn't coming out of the general fund. This 28 means the people who are exempt, like the Boy 6 1 Scouts, the veterans should be treated at least on 2 the same level as a Boy Scout. 3 And I really feel that my First Amendment 4 rights were taken away along with losing that 5 business because I had to work for AT&T, who does 6 not really care too much about veterans either. 7 There seems to be an anti-veteran theme 8 throughout this entire state. So, my wife and I 9 have been considering moving to Rhode Island 'cause 10 there's no sales tax on art. 11 If you want to find the artists in this 12 state, you'll find them in Las Vegas; you'll find 13 them in New Mexico; you'll find them in Oregon and 14 Washington because the First Amendment is treated 15 differently when you're an artist. 16 So, that was one of the other points I 17 raised last time I was here. The Ninth Circuit 18 Court of Appeals also, White versus Sparks, has 19 pretty much said public art is really a First 20 Amendment right. 21 As a marine I swore to uphold the 22 constitution. The First Amendment is the most 23 important one, I feel. 24 And thank you for your time. 25 MS. MA: Thank you. 26 ---o0o--- 27 28 7 1 MICHAEL C. WARNKEN 2 ---o0o--- 3 MR. WARNKEN: Yeah, uhmm -- 4 MR. CONNELL: Take it easy. 5 MR. WARNKEN: -- Michael Warnken. I 6 guess I have three minutes. I don't -- is there a 7 clock around that I can see? 8 MR. CONNELL: I'm your clock. Don't worry. 9 MR. WARNKEN: Okay. I'll -- I'll try not 10 to ramble. 11 I just was informed this morning by Bill 12 that -- I'd sort of been helping him for about seven 13 years on this issue, 16102. It's pretty -- pretty 14 clear. 15 It's -- it was a law that was more or less 16 made in the 1850s, thereabouts. There were only two 17 taxes, property tax and, you know, a vending tax or 18 so forth. 19 It's -- you know, watching this whole 20 process has been sort of embarrassing, you know, 21 it's -- you know, it's -- it's pretty 22 straightforward. 23 I'm reticent and very aware of the fact 24 that inflation's happened and the desire to give, 25 you know, the whole -- the whole meaning of it, its 26 full force and effect, is difficult. 27 The real problem is State and it's 28 something that's not even said. It's the biggest 8 1 problem. We have the worst representation in the 2 nation. 3 Our lower chamber, the House of Commons, 4 the Assembly, each member has 500,000 people. Each 5 Senator in California has one million. 6 And the founders, the United States 7 founders -- Jefferson, Washington, in the debates 8 they said that 100,000 -- they actually suggested 9 that each US Senator only represent 100,000. 10 The Members of the Board of Equalization 11 have a district 100 times bigger than that at 10 12 million people apiece. You can't represent anybody. 13 And I'm not -- I am not here to insult you, 14 these are the realities. We have four districts for 15 40 million people. 16 It's not so much a war on the veteran, it's 17 a war on on the individual. Individuals don't have 18 rights. Individuals don't have the ability to 19 assert their rights. They don't have the ability to 20 have access to their reps in the legislature. 21 States like New Hampshire, where one rep 22 represents 3,000 people, you have the ability to 23 certain things. You have the ability to stand up to 24 the executive, to the judiciary, to have your 25 rights, whether it's the First Amendment, the Ninth 26 Amendment, the Twelfth Amendment -- well, it's 27 really worth anything, but, you know, access to your 28 representative. That's the most important thing. 9 1 I watch Bill. And he comes to Sacramento. 2 He keeps me informed. I go to his hot dog stand. 3 He's one of the most popular people in Santa Barbara 4 County, bar none. I think he has the ability to 5 influence 500 votes, bar none, bare minimum. 6 And I don't think that's enough to matter 7 in this state -- 500 votes. It's more than probably 8 the five votes that I could influence. 9 And he's been going at this for 25 years, 10 almost -- excuse me. Boy, that's yeoman's work. 11 And I think the reality is that the employees of the 12 State -- their salaries, their pensions, their 13 retirements, their per diems and every other gross 14 thing that we burn, light on fire, and we don't talk 15 about that comes in the audit reports -- have 16 greater influence, greater force, greater effect. 17 And the net policy becomes how do we stop 18 him, but keep him going to make him think that the 19 process is still okay and fair, but at the same time 20 not really give him what he needs because if we 21 did -- shoot. 22 One man can not represent 500,000 people. 23 One man can not represent a million. And man, in 24 the end, is the measure. And we will be judged how 25 we treat the least among us. 26 And we're not. And that will continue to 27 be until we fix the issue of representation. We 28 have taxation without any agency at this point in 10 1 time. 2 So, what happens is more or less what 3 happens and I guess you'll do the best. 4 That's what the problem is today. Thank 5 you. 6 MS. MA: Bill. 7 ---o0o--- 8 WILLIAM CONNELL 9 ---o0o--- 10 MR. CONNELL: Good morning, ladies and 11 gentlemen. We've just had a nice hour meeting, 12 prior to your Board meeting. 13 The gentlemen, quite a lot -- and a lot was 14 discussed and gone over. 15 A few things so that we're all clear -- 16 Assembly Bill 809, Assembly Bill 805, no, Senate 17 Bill -- Senate Bill 805, 809, Assembly Bill 919 -- 18 very accurate, set. I had one no vote out of that 19 group. 2006, Assembly Bill 1869 and then in 2003, 20 Assembly Bill 83893. 21 As you can see, I let it go for a while. 22 And I made two phone calls, both to the Chair -- 23 both to the author. 24 I said, "Do you understand what you're 25 doing?" 15 seconds, they pulled both of those 26 bills. 27 Three wins, two more wins -- not one word 28 was mentioned of the defeated legislation in my 11 1 assessment of 919. I've been ostracized. I've been 2 labeled as some sort of nut that will not let this 3 go. 4 Plain meaning exemption statute, we've 5 narrowed down and going to expand those veteran 6 vendors, what they do -- that was talked about 7 earlier. 8 We have to also understand that we, as 9 Californians, we lead. You lead us. You're elected 10 leaders. We need a full understanding from you 11 that, yes, the veteran has an exemption; yes, the 12 veteran has had this exemption for 141 years. 13 This exemption has to be read, plain 14 meaning, hard plain meaning. And you must adjust 15 some of the money that's in our treasury to be 16 returned to these veteran vendors. 17 I'd like to give this a big rest. It 18 doesn't seem I'm going to be able to at this point. 19 If I have to have another piece of 20 legislation put in, let me know. Whose door do you 21 want me to knock on? Let me know. 22 These disabled American veterans who are 23 coming home from conflict are to be issued a 24 business license and left alone. 25 Here's the other thing, I don't know why it 26 happened, but the City of Santa Barbara charged me 27 $600 to sell a hot dog on the 4th of July -- 28 completely contrary to all of the laws that we've 12 1 been working on. They have to be notified. They 2 have to be notified by the State Controller's 3 office, the State Treasurer. You're not supposed to 4 take money from these veterans, exempt. 5 Now it's not just me. I'm getting phone 6 calls left and right. And horror shows -- just 7 horrible. 8 "Bill, they said they're not 9 going to give me a business license 10 because I'm not going to pay for it." 11 I said, 12 "You're not supposed to pay for it." 13 "Oh, they're not acknowledging that." 14 There's still a very, very gray area -- 15 who's entitled to the exemption, what the exemption 16 covers. 17 You know, I'm here. I'll work with 18 anybody, any time, any place, I'll be there. I was 19 here a day early for the meeting this morning. 20 I mean I can -- I can do a lot -- a lot. 21 I'm one person and it's already done with me. You 22 guys have kept tens of thousands of my dollars for 23 last twenty some odd years. I'm out -- I'm out on 24 N Street. I should have maybe a hat, passing a hat 25 for money. 26 But these veteran vendors that are coming 27 home, these veterans that are coming home, we're 28 going to break our backs to help them. 13 1 Now I gave you one piece of LA Times. It 2 was nice. 3 Did you get the copy of the LA Times? 4 MS. RICHMOND: Yes, sir. 5 MR. CONNELL: You got that? 6 One of the major things that 22 American 7 veterans blow their brains out every day is because 8 of the transitional problems coming back into 9 civilian life. 10 This makes it easier. It gives them a job. 11 It gives them something to do. 12 You put this as a very narrow exemption. 13 Two things -- two words -- with or without 14 employees, that should be No. 1; and No. 2, in 2022 15 there's a sunset clause in this. I want that sunset 16 clause eliminated. 17 This has been a law that's been on the 18 books 140 years. Now I expect all of us to take a 19 deep breath. I want you to use your smarts. I want 20 you to go by guidance of these tax attorneys. 21 Don't go word for word because they can be 22 a little off sometimes. But we're going to help our 23 American veterans and we're going to do so very 24 quickly. 25 And I appreciate the time. I'm sorry I 26 didn't meet you in your office yesterday. I was 27 around. 28 Likewise, what is that Ms. -- I can't read 14 1 that. 2 VOICE: Stowers. 3 MS. STOWERS: Stowers. 4 MR. CONNELL: I'm sorry I haven't met you 5 either. 6 I hope you will come to enjoy what I've 7 been trying to do as single entity for all these 8 years. 9 Nobody would tell me the other veterans. I 10 went out and found this one, Mr. Johnny Morris. I 11 don't know where he is. The female Navy veteran, 12 who's up in Trinity County, I still don't -- I can't 13 get ahold of these people. 14 There is veterans -- there's not hundreds, 15 there's not thousands -- there is a group of people 16 who are owed money. Let's get it to them. 17 Let's do -- let's do anything possible -- 18 social media. We've discussed the whole list of the 19 support I had on 919, has to be 20, 25 different 20 veterans' groups -- contact all of them. 21 Contact them three times -- one for an 22 acknowledgement; two, for who do you have; three, 23 last call for alcohol. 24 MS. RICHMOND: Time's expired. 25 MR. CONNELL: Thank you so much for the 26 time. Thank you, ladies and gentlemen. 27 Listen, I hope from now on this whole year 28 becomes easier for you. This is not a difficult 15 1 issue. It can be straightened out comfortably. 2 Thank you very much for your attention. 3 MS. MA: Thank you, Mr. Connell. Thank you 4 for your service and your persistence. 5 I'm sorry you couldn't find me yesterday. 6 We just got our business cards yesterday. 7 So, I think one of my staff members sitting 8 in the front row can give you our new address. And 9 look forward to working with you. 10 MR. CONNELL: Okay. I'm going to take all 11 these back because Joann Richmond doesn't need all 12 this copies. 13 MS. MA: Thank you, Mr. Powers, Mr. Warnken 14 and Mr. Connell for coming in. 15 ---o0o--- 16 17 18 19 20 21 22 23 24 25 26 27 28 16 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on JANUARY 21, 2015 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 16 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: FEBRUARY 12, 2015 18 19 20 ____________________________ 21 JULI PRICE JACKSON 22 Hearing Reporter 23 24 25 26 27 28 17