1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 MARCH 26, 2015 9 10 P OTHER ADMINISTRATIVE MATTERS 11 P1 EXECUTIVE DIRECTOR'S REPORT 12 P1.1 CROS PROJECT UPDATE AND ACTIONS 13 14 15 16 17 18 19 20 21 Reported by: Juli Price Jackson 22 No. CSR 5214 23 24 25 26 27 28 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Sen. George Runner (Ret.) Vice-Chairman 6 7 Fiona Ma, CPA Member 8 9 Diane L. Harkey Member 10 11 Yvette Stowers Appearing for Betty T. 12 Yee, State Controller (per Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief, Board Proceedings Division 16 17 For the Board: Eric Steen CROS Project Director 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MARCH 26, 2015 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: Our next item is P1.2, CROS 7 Project Update and Actions. 8 MR. STEEN: Good afternoon, Members, 9 Mr. Chairman, Eric Steen, CROS Project Director. 10 Thanks for the opportunity to give you an 11 update today. We've received the second round of 12 draft proposals from our bidders. And we expect 13 final proposals in mid-May. 14 And assuming we can keep our schedule, we 15 will expect to start implementation in the first 16 part of 2016. 17 The project continues to operate within its 18 budget. We spent 19 -- $19.8 million to date. Some 19 of that is on the procurement; much of that is on 20 the pre-implementation activities, which have 21 already, I think, saved us from cost and schedule 22 overruns that would have occurred during the 23 implementation. 24 We've also been helpful in the generation 25 of revenue, up to $148.1 million to date. And while 26 there are questions often about the timeline and 27 changes related to the timeline for the procurement, 28 we have leveraged every single second that we've 3 1 been afforded to ready ourselves for the 2 implementation once the vendor is here. 3 And, Mr. Chairman, at the last hearing you 4 had asked a question about revenue generation. So, 5 I do want to speak to that briefly. 6 It's very difficult to attribute every 7 single increase in revenue to the new technology, 8 however, we do have precedent for that through what 9 we have seen at the Franchise Tax Board and other -- 10 other State agencies, other revenue agencies 11 throughout the nation. 12 And we anticipate new dollars as a result 13 of improved data analytics, being able to identify 14 under reporting. We also anticipate being far more 15 efficient than we are -- that's through the aid of 16 new technology, new processes, which also frees up 17 resources to work on activities that are more 18 closely linked to revenue generation. 19 And, also, part of our objective is to 20 improve the taxpayer experience, which should assist 21 with voluntary compliance. 22 Also Ms. Harkey, you had asked a question 23 about -- with a procurement that lasts so long, how 24 do we ensure that we have technology that's up to 25 date by the time we get to the implementation? 26 Well, we can't keep pace with every 27 possible technology innovation. We do have 28 requirements in the RFP so that the proposal is 4 1 evaluated against innovation. So, bidders who 2 propose innovative solutions get more points. That 3 should safeguard us. 4 Also we have requirements around standards, 5 technology standards being up to date. And I can 6 assure that whatever gets proposed, it will be far 7 more up to date than what we have today. So, it'll 8 be very helpful in that regard. 9 Thus ends my report. If there anything I 10 can -- any questions that I answer, I would be happy 11 to answer them now. 12 MR. HORTON: Discussion, Members? 13 Hearing none, the Board will receive and 14 file. 15 MS. HARKEY: Thank you. 16 MR. STEEN: Thank you very much. 17 ---o0o--- 18 19 20 21 22 23 24 25 26 27 28 5 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 MARCH 26, 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 5 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: MAY 18, 2015 18 19 20 ____________________________ 21 JULI PRICE JACKSON 22 Hearing Reporter 23 24 25 26 27 28 6