1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 APRIL 28, 2015 9 10 F PUBLIC HEARINGS 11 F1 PROPERTY TAXES 12 STATE ASSESSEES' PRESENTATIONS ON THE 13 VAUATION OF STATE-ASSESSED PROPERTIES 14 15 16 17 18 19 20 21 22 Reported by: Juli Price Jackson 23 No. CSR 5214 24 25 26 27 28 1 1 P R E S E N T 2 For the Board Jerome E. Horton 3 of Equalization: Chairman 4 Sen. George Runner (Ret.) 5 Vice-Chairman 6 Fiona Ma, CPA 7 Member 8 Diane L. Harkey 9 Member 10 Yvette Stowers 11 Appearing for Betty T. Yee, State Controller 12 (per Government Code Section 7.9) 13 14 Joann Richmond Chief, Board 15 Proceedings Division 16 17 For Staff: Ken Thompson Chief 18 State-Assessed Properties Division 19 20 ---oOo--- 21 22 Speaker: Peter Michaels Attorney 23 Law Offices of Peter Michaels 24 25 26 27 ---o0o--- 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 4 APRIL 28, 2015 5 ---oOo--- 6 MR. HORTON: Ms. Richmond, what is our next 7 item? 8 MS. RICHMOND: The next item we're taking 9 up is item F, Public Hearings, item F1, Property 10 Taxes - State Assessees' Presentations on the 11 Valuation of State-Assessed Properties. 12 And we do have a public comment. 13 MR. HORTON: We would ask that Peter 14 Michaels please come forward. 15 Peter Michaels, attorney for the Law Firm 16 for Peter Michaels. 17 Okay, good afternoon, Mr. Michaels. 18 MR. MICHAELS: Mr. Thompson, do you want to 19 introduce the -- 20 MR. RUNNER: He does not. 21 MR. HORTON: Oh, yeah. 22 MR. THOMPSON: Okay, I'll take it. 23 I'm Ken Thompson from the State-Assessed 24 Properties Division. And we -- 25 MR. HORTON: There you go, Peter. 26 MR. MICHAELS: By the hammer. 27 MR. THOMPSON: We're here for the second 28 time in the public setting for State assessees to 3 1 make comments related to the valuation of 2 State-Assessed Properties. 3 MR. HORTON: Okay. 4 ---o0o--- 5 PETER MICHAELS 6 ---o0o--- 7 MR. MICHAELS: Thank you. And these 8 remarks will be brief. 9 I'm here today on behalf of 47 State 10 assessees in the local exchange telephone, 11 interexchange telephone, wireless telephone, gas and 12 electric utilities, railroads, pipelines. 13 And since January we've been working 14 collaboratively with Mr. Thompson and his staff. 15 Some of the folks whom I represent have received 16 preliminary recommendations, but Mr. Thompson's 17 staff hasn't finalized its recommendations yet. 18 Those recommendations will be finalized and sent to 19 you by May 12th. 20 And, so, we continue to work 21 collaboratively, as I say, with Mr. Thompson and his 22 staff to narrow any differences and to address -- 23 issue by issue, company by company -- valuation for 24 this year. 25 It's a dynamic process. The market's 26 changed. The companies -- businesses change from 27 one year to the next. So, we've been working 28 closely with Mr. Thompson and his staff. 4 1 And, so far, so good. 2 MR. HORTON: Thank you. 3 Mr. Thompson. 4 MR. THOMPSON: No comment at this time. 5 We were -- actually, our schedule is to 6 distribute the appraisal data reports on the 18th 7 this year. 8 MR. HORTON: Okay, thank you. 9 MR. MICHAELS: And the value setting's on 10 the 27th, I believe. 11 Is that right, Joanne, 27th? 12 MS. RICHMOND: Correct. 13 MR. MICHAELS: Yeah. So, there may be, 14 depending on the recommendations, a possibility 15 between their release on the 18th -- the 18th, you 16 said? And the valuation on the 27th, a nine-day 17 window there, it's possible that we'll reach out to 18 you to discuss specifics, but that there is a little 19 window in there between completion of Mr. Thompson's 20 work and your adoption of the recommendations by 21 Mr. Thompson's staff. 22 MR. HORTON: Well, thank you very much for 23 your presentation. The Board will receive and file. 24 Ms. Richmond -- strike. 25 Member Ma. 26 MS. MA: I have a question of Mr. Thompson 27 since you're here. 28 Are you done with your -- 5 1 MR. MICHAELS: You're the Board Member. 2 MS. MA: -- just -- so, there is a bill in 3 the legislature right now, Senator Hill's bill on 4 aircraft assessments. 5 And since I have you here, just 6 wondering -- I know we don't currently do aircraft 7 assessments, but if we were to do aircraft 8 assessments, you know, what would that involve in 9 your mind? 10 MR. THOMPSON: Well, there's -- there's a 11 couple of things. 12 First of all, we need to understand the 13 exact metrics of the valuation, metrics to assess 14 aircraft. 15 If it's just aircraft or if this is of all 16 of the personal property of the -- of these 17 companies, which has its own problems. 18 For instance, American -- or FedEx and UPS 19 has personal property all over the State, just 20 the -- so, we really need to define what the -- the 21 problem is where this property is located. 22 We have to develop forms, hire people, 23 train people. There's quite a bit involved. 24 We have to work with the counties to 25 understand where all of the information is and have 26 an exchange of information to be able to just fully 27 inform and train the staff to be able to inform the 28 Board on -- on what the appropriate value would be 6 1 for these companies. 2 Mobile personal property is among the most 3 inefficient in terms of cost per dollar of assessed 4 value to -- to -- to process into value because it 5 moves all over. 6 There is obsolescence issues. There's 7 other issues that -- that I may not even know 8 because we haven't done the study of this industry. 9 But it's quite an undertaking for -- for something 10 of this sort. 11 We have a little experience. In 2003 we 12 took over the assessment authority for electric 13 generation facilities, which is a complete different 14 appraisal metric than when they were regulated 15 electric generation facilities. And, so, we have a 16 little bit of a -- of an understanding of what an 17 enormity it is. 18 And at that point we weren't allowed 19 additional staff and we weren't allowed additional 20 time to train. So, we definitely want to do it 21 right this time. 22 MS. MA: Thank you. 23 MR. HORTON: Thank you very much. 24 Further discussion, Members? 25 Hearing none, thank you for your 26 presentation. We will receive and file. 27 Thank you, Mr. Michaels. 28 MR. MICHAELS: Thank you. 7 1 ---o0o--- 2 REPORTER'S CERTIFICATE 3 4 State of California ) 5 ) ss 6 County of Sacramento ) 7 8 I, JULI PRICE JACKSON, Hearing Reporter for 9 the California State Board of Equalization certify 10 that on APRIL 28, 2015 I recorded verbatim, in 11 shorthand, to the best of my ability, the 12 proceedings in the above-entitled hearing; that I 13 transcribed the shorthand writing into typewriting; 14 and that the preceding pages 1 through 7 constitute 15 a complete and accurate transcription of the 16 shorthand writing. 17 18 Dated: June 4, 2015 19 20 21 ____________________________ 22 JULI PRICE JACKSON 23 Hearing Reporter 24 25 26 27 28 8