1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JUNE 23, 2015 9 F PUBLIC HEARINGS 10 F2 PROPERTY TAXPAYERS' 11 BILL OF RIGHTS HEARINGS 12 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 For the Board Jerome E. Horton of Equalization: Chairman 3 4 Sen. George Runner (Ret.) Vice-Chairman 5 6 Fiona Ma, CPA Member 7 8 Diane L. Harkey Member 9 10 Yvette Stowers Appearing for Betty T. 11 Yee, State Controller (per Government Code 12 Section 7.9) 13 Joann Richmond 14 Chief, Board Proceedings Division 15 16 For Staff: Todd Gilman Taxpayer Rights Advocate 17 18 Richard Moon Tax Counsel IV 19 20 ---oOo--- 21 22 23 24 25 26 27 28 2 1 INDEX OF SPEAKERS 2 ---o0o--- 3 NAME PAGE 4 THOMAS CRANDALL 4 5 TIM PHILLIS 19 6 7 ---o0o--- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JUNE 23, 2015 4 ---oOo--- 5 MR. GILMAN: Moving on to the property tax. 6 Good afternoon, Chairman Horton and Members of the 7 Board. 8 I'm Todd Gilman, Taxpayers' Rights Advocate 9 with the State Board of Equalization. This is the 10 property taxes Taxpayer bill of Rights Hearing for 11 Culver City, June 23rd, 2015, where individuals have 12 the opportunity to present their ideas, concerns and 13 recommendations regarding legislation, the quality 14 of agency services and other issues related to the 15 Board's administration of its tax programs, 16 including State and County property tax programs and 17 any issues identified in the Taxpayers' Rights 18 Advocate's 2013-14 annual report. 19 Our first speaker is Mr. Thomas Crandall. 20 Mr. Crandall. 21 ---o0o--- 22 THOMAS CRANDALL 23 ---o0o--- 24 MR. HORTON: Thank you, Mr. Crandall. 25 I'd also ask that Mr. Tim Phillis come 26 forward as well, and Mr. Cris O'Neall. 27 MR. CRANDALL: All right. 28 MR. HORTON: Welcome to the Board of 4 1 Equalization. 2 MR. CRANDALL: Thank you. 3 I appear before the Board today to offer a 4 recommendation to improve the property taxpayers' 5 rights advocacy program. And I will almost -- also 6 comment on the Board's overall administration and 7 enforcement of the Revenue and Tax Code. 8 I was here last year, and as I noted last 9 year, the Taxpayer Rights Advocate's Office is 10 well-intentioned, but it lacks the expertise of 11 statute to recognize and elevate significant 12 taxpayer rights issues. 13 My recommendation last year was for the 14 Board to provide the TRA a dedicated legal counsel, 15 committed to the taxpayer's perspective and the 16 protection of taxpayer rights. 17 The Board assured me last year that this 18 was unnecessary. I was invited to directly contact 19 the BOE Legal Department with my taxpayer rights 20 questions. And Richard Moon was identified as the 21 proper Legal Department liaison. 22 I followed the Board's recommendation and 23 with Mr. Moon's assistance, I solicited and received 24 several BOE legal opinions. 25 I found the opinions contained biased 26 interpretations of the Code, contrived to support 27 existing assessor positions and generally devoid of 28 a taxpayer perspective. 5 1 A proper evaluation of these opinions 2 cannot be accomplished at this forum. However, 3 Second District Deputy James Cool has offered to 4 host a meeting in Sacramento to discuss this and 5 related matters. 6 I request the TRA attend and also 7 facilitate a July or August 2015 meeting. 8 Actual taxpayer rights inherently exist 9 within the Revenue and Tax Code. The TRA has no 10 authority to correct a taxpayer rights violation. 11 And often TRA advocacy merely entails explaining an 12 assessor's existing position. 13 My recommendation this year is if a 14 taxpayer disagrees with a TRA explanation, the TRA 15 shall elevate the matter to the appropriate District 16 office for resolution. Only the District office has 17 the enforcement authority to require an assessor to 18 correct an assessment and error in assessment. 19 The administration and enforcement of the 20 RTC as sole responsibility of the State Board. I 21 made a request in my District office, this First 22 District, now the Second District, in -- 23 August 14th, 2014 to investigate the Humboldt County 24 Assessor's current tax year refusal to assess 25 according to the County record. 26 To date, my District Board Member has 27 abdicated their duty to investigate and instead 28 offered the aforementioned legal opinions and a 6 1 letter from Mr. David Gau as a proxy investigation. 2 This is improper. I expect a direct 3 investigation and a direct response from my District 4 office with a credible explanation based on statute. 5 Referring to Mr. Gau's letter, he did 6 address my concern for uncollectible tax revenue. 7 The letter advised: 1, assessment and taxation -- 8 and tax collection are separate revenue and taxation 9 rolls; No. 2, that statutes exist is that ensure 10 assessed property taxes do not remain uncollected; 11 and 3, that County Counsel would guide the tax 12 collector in the application of those statutes. 13 And I would add to this that the State 14 Controller shall promote uniformity of procedure in 15 the collection of taxes throughout the state. 16 So, I agreed with Mr. Gau, but I also think 17 that the State Controller has a role in the tax 18 collection that's conducted in a uniform way. 19 Unfortunately, the County Counsel of 20 Humboldt County has implemented a nonuniform tax 21 collection procedure that combines the roles of 22 assessment and tax collection. 23 County Counsel now holds that the assessor 24 will only recognize those owners of record who 25 contribute to an unsubstantiated lump sum payment of 26 $135,000 payable to the Humboldt County tax 27 collector. 28 I submit this illegal stipulation occurs in 7 1 lieu of a timely district office response to my 2 August 2014 request to investigate the assessor's 3 illegal disregard of the current County record. 4 Conclusion, Board oversight is required to 5 protect taxpayer rights and ensure uniform 6 practices. District Board Members cannot carry out 7 their duties and responsibilities by deferring to 8 the BOE Legal Department. Your office must 9 investigate District matters brought to your 10 attention. 11 Taxpayers are an implicit early warning 12 system. I alerted the TRA in October of 2002 of the 13 initial disregard of the county record by the 14 Humboldt County Assessor. This violation of RTC 15 Section 405 (a) was subsequently condoned by a BOE 16 annotation, 220.0148, in December of 2002, two 17 months after I alerted the TRA of this violation. 18 This assessor's reliance on this flawed 19 annotation allowed 14 years of uncollectible 20 property tax revenue to accrue. And in 2015, County 21 Counsel continues their dominion over this assessor 22 and Revenue and Taxation in Humboldt County. 23 Had the TRA referred my 2002 request to my 24 District office, and had my District office 25 investigated this violation in 2002 and enforced the 26 Code, both Revenue and Taxation and taxpayers would 27 have had -- would have been much better served. 28 This protracted and documented assessment 8 1 fiasco presents a unique opportunity for the Board 2 to both improve taxpayer advocacy and affirm to all 3 assessors their fiduciary duty and liability under 4 the Code. 5 I encourage the Board to capitalize this 6 opportunity. Thank you. 7 MR. HORTON: Thank you very much. 8 Discussion, Members? 9 Mr. Gilman. 10 MR. GILMAN: Thank you, sir. 11 As I reported to you last year in terms -- 12 we'll start off with advocacy portion of it. I 13 understand Mr. Crandall's concern regarding the 14 Advocate's office not having a legal counsel that 15 they can talk to. 16 However, I have to also bring to your 17 attention that, as I reported last year, the 18 Advocate's office, if there's a dispute in which we 19 disagree with a legal opinion from our Legal 20 Department, it doesn't end there. 21 I have the ability to go to the Executive 22 Director. I report to the Executive Director. If 23 the Executive Director and the Chief Counsel can't 24 come to terms or an agreement in terms of my 25 concern, then that's a matter that would be 26 agendized before you. So, there is opportunity to 27 bring an item forward. 28 With respect to Mr. Crandall's issue, I 9 1 think it would be helpful to maybe put a little 2 history -- provide you with a little history in 3 terms of what's gone on and what my office has been 4 able to do. 5 And I appreciate him making the pilgrimage 6 to Culver City to testify in front of you today to 7 express his frustration with the Humboldt County 8 assessor, as well as his concerns with respect to 9 the Taxpayers' Bill of Rights or the taxpayer's 10 rights and the assessor not following the law in 11 2000 when the assessor would not enroll his 12 property. 13 Members, this a fairly complicated property 14 tax matter. As you're aware, a number of legal 15 opinions have been provided to Mr. Crandall, Mr. Bob 16 McKee, who was the developer of the ranch property, 17 and the Humboldt County Assessor. 18 Also, as you may be aware, Humboldt County 19 fought the lawsuit where the county sued the 20 developer more than a decade ago, claiming the 21 developer violated County guidelines, as well as the 22 California Williamson Act, by illegally subdividing 23 some 13,000 acres of ranch land in southern Humboldt 24 County. 25 It's my understanding the trial court sided 26 with the developer in 2013, which affected 27 Mr. Crandall's property. 28 An appeal was filed in 2014 and a decision 10 1 has been rendered, although I don't know what the 2 outcome of that appeal is. 3 I mean, there's a lot of legal issues here, 4 there's just a lot of questions that are maybe 5 unanswered for Mr. Crandall. 6 It might be helpful if maybe one of our tax 7 attorneys came up to address some of the legal 8 matters that Mr. Crandall has brought forward. 9 I know he's spoke to Mr. Richard Moon and 10 it might be helpful to have him up here. 11 MR. HORTON: Mr. Moon. 12 It might also be helpful, just for 13 clarification purposes, that we somewhat clarify 14 when we speak of the District offices, which 15 District office are you referring to? 16 MR. CRANDALL: It was your -- 17 Betty Yee, First District, now that's 18 changed to Second District. 19 MR. HORTON: My apologies, I actually 20 thought he was talking about the Assessor's office. 21 MR. GILMAN: Members' offices. 22 MR. CRANDALL: The District office, I meant 23 my Member of the Board District office. 24 MR. HORTON: Mr. Moon, can you also share 25 with the Board the authority provided by -- provided 26 to the Board of Equalization as it relates to our 27 oversight? 28 At the same time, it might be helpful if 11 1 Mr. Gilman and yourself can advise us if -- there 2 may be a need for Taxpayer Bill of Rights that is 3 State legislation that the assessors are required to 4 follow that we may be able to sponsor and may end up 5 with a creation of a TRO to deal with the issues 6 that are under their jurisdiction, and not 7 necessarily under ours in the advisory capacity that 8 we have. 9 MR. MOON: Good afternoon, Mr. Chair, 10 Members of the Board, Richard Moon with the Legal 11 Department. 12 We -- we -- it's true we have received 13 several requests for legal opinions from 14 Mr. Crandall, which we have answered. 15 We have provided those opinions under the 16 authority of the Government Code which says that the 17 Board of Equalization shall guide assessors when 18 assessing and Assessment Appeals Board when 19 adjudicating property value matters. 20 And, so, that authority is exercised by the 21 Board through their -- through the staff's, for 22 example, their rulemaking or through their legal 23 opinions. 24 And, so, we have issued several legal 25 opinions on -- on property tax statutes. I think 26 there may be a combination of the answers that 27 Mr. Crandall got from the legal opinions he did not 28 agree with and didn't necessarily like, as well as, 12 1 perhaps, some of the legal opinions that were 2 written were not as clear as they could be as to its 3 reasoning and conclusions. 4 So, I mean if that's a concern, then I -- 5 I've offered to speak with Mr. Crandall and have a 6 conversation with him sometime that makes things a 7 little bit more clear. 8 MS. MA: So, I guess -- just coming into 9 this situation, so, what has been the issue? 10 Obviously, Mr. Gilman talked about a court 11 appeals case. Maybe Mr. Crandall can enlighten us 12 as to what the result is. 13 And as the Chairman said, if it's something 14 in the law that needs to be changed because it's not 15 clear, you know, perhaps we can work on that if it's 16 outside of our jurisdiction. 17 MR. MOON: Sure. Well -- and please feel 18 free to correct me if I have any of the facts wrong, 19 but in 2000 Mr. McKee had a parcel of property that 20 was under the Williamson Act. And he sold portions 21 of that property, including a portion of it to 22 Mr. Crandall. 23 The Humboldt County Assessor at that time 24 refused to acknowledge those transfers because the 25 County was asserting the position that the transfers 26 violated the Williamson Act and, so, were void. 27 They took that to court. It was settled at 28 the Court of Appeal, I believe, in 2008, at which 13 1 time the court said that Mr. McKee did, in fact, 2 violate the Williamson Act and then remanded it back 3 to the Superior Court in order to fashion a remedy. 4 In 2013 the Superior Court came out with 5 that remedy and said -- and instituted penal fines 6 against Mr. McKee, but did not void the transfer. 7 So, they let the transfers stand. 8 And at that point the Humboldt County 9 Assessor then began to assess the properties in line 10 consistently with that decision, which meant for her 11 to cancel the assessments before 2010 on Mr. McKee 12 and then issue escape assessments from 2010 to 2014 13 on the transfer -- on the transferees of the 14 property that were specifically mentioned in that 15 court case. 16 Mr. McKee decided to appeal a part of that 17 Superior Court decision. And that -- and the Court 18 of Appeal recently rendered a decision supporting 19 the County, I think probably not even a week ago. 20 And, so, the legal opinions that we had 21 written relate to escape assessments, to certain 22 provisions of a civil code that deal with the 23 assessors' duties and then, as Mr. Crandall had 24 mentioned, on a specific annotation, that that had 25 been around since, I believe, 2002. 26 Okay, Mr. Crandall, anything? 27 MR. CRANDALL: Yes, basically when the 28 court did not nullify any of the deeds, what you had 14 1 is an assessor assessing for 14 years parcels that 2 didn't exist. They -- they were fictitious parcels. 3 They were sections of USGS sections. 4 So, you have an assessor for 14 years 5 banking on nullification. And I submit that 405(a) 6 says, "annually" -- and this is a taxpayer right -- 7 annually the assessors shall assess property to 8 those owning, claiming, possessing. 9 They bet on a nullification and they lost. 10 And they had no right to -- there's a presumption of 11 deed. There's a -- the deeds are presumed correct 12 unless you -- before a trier of fact -- overturn 13 those. 14 So, you have this policy -- that 15 annotation, by the way, annotation 220.148, 16 supported them holding off on processing these 17 deeds, which, by the way, the County Recorder is the 18 one who has the authority to determine whether deeds 19 are valid. The Assessor has no authority. They're 20 supposed to follow the County record. 21 They went outside -- there is nothing in 22 the Revenue and Tax Code that allows an assessor to 23 rebut a deed. 24 Now, there is some disagreement in -- with 25 Legal, but I say that that does not exist. The 26 Recorder went through these deeds. 27 These are federal patent parcels. The land 28 that I bought was homesteaded in 1878. They refused 15 1 to map those. 2 This is -- this is much more than denying a 3 change of ownership. Their maps were incorrect for 4 15 years. And now how do you go back and sort that 5 out? You can't. 6 It's a real -- it's a real serious problem. 7 And I'm -- there is not a lot of money involved 8 here, but the issue is that the system didn't work. 9 And like in 2002 I came in to the TRA and 10 said, "Hey, this is going on." 11 And in December of 2002 the Legal 12 Department came down against RTC 405 (a), anyway and 13 it caused this big tax mess. 14 So, anyway -- I'm done. I get too heated 15 on this. 16 MS. MA: No, no, I respect the 17 clarification. And I've been going up to Humboldt 18 quite often in the last couple of months. 19 So, it'd be helpful if we all sat down 20 together with the Recorder, with the Assessor, you, 21 my office, and see we what we can do to rectify your 22 situation. 23 MR. CRANDALL: Yes, but I asked for this in 24 August of 2014 with Betty Yee. This is way late, 25 okay. 26 So, I understand. 27 MS. MA: I just started January 5th -- 28 MR. CRANDALL: I know you did. 16 1 MS. MA: -- and I'm going to try to -- 2 MR. CRANDALL: I know you did. 3 MS. MA: -- make it right. 4 MR. CRANDALL: But -- 5 MS. MA: -- from here on out. 6 MR. CRANDALL: -- I'm really trying to work 7 with you guys. 8 And I decided my District office is really 9 the place where I can get the ultimate help. And I 10 look forward to that. 11 MS. MA: Okay. 12 MR. CRANDALL: Thank you. 13 MS. HARKEY: Ms. Ma will follow through. 14 MR. HORTON: Yeah. I almost feel sort of 15 compelled to make sure that we provide the taxpayer 16 with some clarification as to what our jurisdiction 17 is once we've -- once the matter has been 18 adjudicated by the courts, Superior Courts, and the 19 Williamson Act. 20 And then the whole escape clause is 21 somewhat outside our jurisdiction, with the 22 exception of providing some inherent guidance, if 23 you will. 24 But I think Member Ma, by virtue of 25 chairing the Legislative Committee is an excellent 26 to begin to look at if there is some clarification 27 in the legislative process that may be necessary 28 there. 17 1 Mr. Moon. 2 MR. MOON: Yeah, I think that's correct. 3 There are certainly parts of this -- the Superior 4 Court decision and the Court of Appeals decision 5 that we have no jurisdiction over because the bulk 6 of the dispute was not over property tax issues. 7 There is certainly parts of it that do 8 apply to property tax. 9 MR. HORTON: And what is our jurisdiction 10 relative to the property tax matters? 11 MR. MOON: Well, to the property tax 12 matters, our jurisdiction is -- is to make sure that 13 this Superior Court decision is followed, whatever 14 they said about the property tax issues, which was 15 essentially that the -- that the transfer should be 16 recognized and the property tax should be assessed 17 accordingly. 18 MR. HORTON: And is the assessor following 19 it? 20 MR. MOON: We -- from what we know, it 21 appears that they are. 22 MR. HORTON: All right. 23 Thank you, Member Ma. 24 Does that conclude your -- 25 MR. CRANDALL: I would like to say that I 26 do agree with the Williamson Act, the courts getting 27 involved in making sure people are complying with 28 their Williamson Act contract. 18 1 The tax part of this is very small. It's 2 whether the deed's valid or not. That's all it is. 3 The decision didn't do anything else taxwise and 4 they turned it over to the Revenue and Tax Code to 5 solve. 6 And, so -- that's all I'm looking for. I 7 agree that people should be fined for violating the 8 Williamson Act contract. And I'm in total 9 compliance. And I covet that contract. 10 So, I have no problems with that -- 11 MR. HORTON: Thank you very much. 12 MR. CRANDALL: -- as a tax. 13 MR. HORTON: Appreciate your time and your 14 testimony. 15 Mr. Gilman. 16 MR. GILMAN: All right, thank you. 17 Our next speaker is Mr. Tim Phillis. 18 Mr. Phillis? 19 ---o0o--- 20 TIM PHILLIS 21 ---o0o--- 22 MR. PHILLIS: Yes, Tim Phillis. 23 I have -- I have some copies of what I'm 24 going to say here. 25 MR. HORTON: Excuse me, Mr. Gilman, I 26 presume you have a copy, Mr. Gilman? 27 MR. GILMAN: I asked for a copy. So, I 28 didn't know if there was enough for the Members, but 19 1 I'll make sure I get a copy. 2 This young man is on it, so, he said I get 3 a copy. 4 MR. HORTON: Okay. 5 MR. PHILLIS: I bet you guys will never 6 guess where I live? 7 Humboldt County. 8 MS. MA: Okay, bring it on. 9 MR. GILMAN: Popular place. 10 MR. PHILLIS: Okay, the briefing is the -- 11 is the bare letter and then my supporting documents 12 are in the pamphlet. 13 So, I'm an amateur at this, I've never done 14 this before. So, if I'm doing something wrong, just 15 let me know. 16 Okay. My name's Tim Phillis. I live in 17 Humboldt County. I'm here before the Board because 18 I purchased a piece of property in Humboldt County 19 for $153,000. 20 Yet the Humboldt County Assessor's office 21 continues to insist on a value above $400,000, at 22 first with no evidence, and then with questionable 23 evidence, at best. 24 I have some questions concerning their 25 office following the Revenue and Taxation Code, 26 which I believe they should do because I have to 27 follow it, they should follow it also. 28 Previously I've asked for answers from 20 1 them, but I've gotten no clarification on the 2 answers that I've -- or on the questions that I've 3 asked. 4 Okay. She believes the Assessment Appeals 5 Board is the appropriate forum -- this is page 1 -- 6 to address my concerns regarding her procedure. 7 According to what I've read the Assessment 8 Appeals Board is establish value according to laws 9 and rules that guide them. 10 With the Assessor's office being 11 unresponsive to my requests, I feel the Board of 12 Equalization is the proper place to address my 13 concerns -- Section 5907, page 2. 14 Page 3 and 4 are the sale documents -- the 15 proof of sale. 16 And, so, page 5 -- after I received the tax 17 bill for the 2013-14 roll in September of 2013 that 18 was amended to put my name on it with a value of 19 $469,000 -- I understand this is a supplemental 20 period -- I expected to see a supplemental notice 21 with a corrected value soon. 22 By mid-November of 2013 I was wondering 23 when the supplemental notice would arrive. I went 24 to the Assessor's office at the end of November to 25 get an update on that tax bill. I was informed the 26 bill would be changed. 27 I felt it was time to file an appeal 28 considering the deadline was November 30th. 21 1 Okay, page 8, I would like to know when the 2 previous owner's value ends and the new owner's 3 value begins. Wouldn't this be the purchase date, 4 also known as the first lien date for new ownership? 5 In 2013 the Assessor's office was notified 6 three times of the change of ownership -- these were 7 the Recorder's office notices, the amended tax bill 8 that I had previously shown, and I went into the 9 office personally. There is a document on there 10 that shows that the lady actually at the counter 11 showed that I showed up to inquire about that. 12 The information I read indicates that the 13 supplemental assessment is to allow immediate 14 valuation of property instead -- instead of waiting 15 until the next lien date. And there's four, five -- 16 there's six pages that support that. 17 I didn't get a supplemental notice until 18 November 16 -- November 6 of 2014, that is 16 months 19 after the sale. That's page 17 and 18. 20 The Assessor's office, in my opinion, 21 didn't issue a supplemental assessment immediately 22 like the law requires. 23 It is my understanding the Revenue and 24 Taxation Code in Section 110 says the purchase price 25 is rebuttably presumed to be the fair market value 26 of real property in an open market arm's length 27 transaction. And there must be a preponderance of 28 evidence to overcome this presumption. That would 22 1 be page 19. 2 What it sounds to me like, that is if there 3 isn't any evidence to the contrary, the presumption 4 has not been overcome. This is a document -- page 5 20 -- this is a document that shows the Assessor's 6 office had no such evidence. 7 On June 20th, 2014 I received a text from 8 the County Appraiser wanting to enter the property 9 to begin his appraisal. That's page 21. That is 10 what we did. 11 On July 2nd, 2014 the Humboldt County 12 Assessor declared the roll complete, but it was not, 13 obviously, because they hadn't finished my appraisal 14 yet. And that's page 22. 15 Does an assessor consult with the 16 appraisers before declaring the roll complete? And, 17 if so, did the Assessor know it wasn't complete but 18 declare it anyway? Page 23. 19 In August of 2014 I met with the County 20 Appraiser, who had comps that indicate the value to 21 be $275,000. I stated I felt that without evidence 22 to show this was not an open market arm's length 23 transaction, the purchase price is fair market 24 value -- again referenced the document that said 25 they don't have evidence it wasn't open market. 26 Also in the meeting I requested any 27 additional evidence as to value, but was told that 28 if there is any, it would not be given without an 23 1 official exchange of information request. This 2 document -- this is not in accord with Section 408, 3 in particular, d and e. 4 I didn't hear from the Assessor's office 5 again until I received a tax bill. 6 In September of 2014 my first tax bill for 7 the regular assessment roll, '14-'15, was based on a 8 value of approximately $472,000, page 28 and 29. 9 On October 6th I met with the appraiser and 10 his supervisor. I requested the evidence to support 11 this value. There was none. 12 On October 20th, 2014 I had a meeting with 13 the assessor, the County appraiser responsible for 14 the appraisal and County Supervisors Rex Bohn and 15 Estelle Fennel. This meeting was recorded. 16 In this meeting I asked for any additional 17 information regarding the value of the property and 18 the evidence to support a value of $472,000, which 19 my tax bill was based on. 20 The Assessor stated there was no new -- no 21 new information and, again, no evidence was produced 22 for the $472,000 value. The $275,000 comps were 23 nowhere to be found. 24 In early November of 2014 I received a 25 Notice of Escape Assessment. By definition, this is 26 not an escape, they just didn't do it. 27 Notice -- those are my notices and I have 28 Section 531 and Assessor's Handbook 201, page 25. 24 1 Remember, they were notified three times in 2013 of 2 the sale. 3 Another notice I received in November 2014 4 was a Prop. 8 decline in value for fiscal year 5 2013-14. From what I understand, this is the 6 supplemental period for this transaction. How can 7 there be a Prop. 8 decline in the very first value 8 year? And the documents are the Prop. 8 docs and 9 then Prop. 8 pamphlet, which says you cannot have a 10 Prop. 8 in a supplemental assessment. 11 Shouldn't this have been a supplemental 12 refund based on the purchase price if no other 13 evidence existed during the supplemental period? 14 If you look, you will see the dates on the 15 escape, the Prop. 8 and the supplemental notices are 16 a day apart, pages 42 and 43. 17 It appears that by asking for evidence on 18 October 20th, which by law they should have had, but 19 didn't, stirred the Assessor's office into action. 20 An updated bill -- an updated tax bill for 21 2014-15 in early November also, was based on a value 22 of $415,000. The County Appraiser had all new comps 23 to support this value, page 44. 24 It's interesting that it took 16 months to 25 issue a supplemental notice, but three weeks to 26 finish five comps and have a new value. That would 27 be October 20th to November 3rd. 28 It's also interesting to note that on my -- 25 1 in my meeting on October 20th, 2014, there was no 2 new information, according to the Humboldt County 3 Assessor's office -- I do have that recorded -- yet 4 the newest comp sheet has a completion date of 5 October 9th, 2014. 6 Also on another document was a statement by 7 the appraiser, quote, "Valued both properties at 8 $415,000 due to a disagreement in value and 9 application for appeal." That's page 45. 10 If there's somewhere in Revenue and 11 Taxation Code that says an assessor can value 12 property because of a disagreement, I couldn't find 13 anything. 14 These new comps shows a vast discrepancy in 15 size. By his own admission, the appraiser had no 16 calculations to arrive at a per acre value, which I 17 requested several times. He mentioned it was his 18 personal opinion of value. I do have that recorded 19 also. 20 This would be in direct conflict with 21 Rule 4 and also some court cases, Main & Von Karman 22 versus County of Orange and Mitchell versus County 23 of Los Angeles. 24 Also I'd like to get the Board's opinion on 25 Rule 314 in regards to counsel at an assessment 26 Appeals Board hearing. 27 I thank you for hearing my presentation and 28 any input would be appreciated. 26 1 MR. HORTON: Thank you very much. 2 You've asked a number of questions that may 3 take us a little bit of time to respond. 4 MR. PHILLIS: That's fine. 5 MR. HORTON: That's okay? 6 MR. PHILLIS: My main concern -- my main 7 question for today -- this is basically a 8 presentation, we can deal with all this, obviously, 9 not here, but Rule 314, legal counsel for applicant 10 and assessor, this is Rule 314, hearing by a County 11 Board, and it is page 51, if you guys would like to 12 look at it. 13 MR. HORTON: Thank you. Mr. Gilman? 14 MR. GILMAN: Thank you, Mr. Chairman. 15 Well, first I want to thank Mr. Phillis for 16 making the trip to Southern California to appear 17 before you today. 18 Yeah, there's a lot to digest here. So, my 19 staff and I will have to go back and look at this 20 information. And I will probably have a follow-up 21 conversation with the Assessor's office as well. 22 But to -- to bring you up to speed, which 23 you probably are aware of this, but in my memorandum 24 I sent to you on June 21st, a local Assessment 25 Appeals Board heard Mr. Phillis's case and 26 instructed both the County Assessor and Mr. Phillis 27 to come back with additional information in terms to 28 basically tell them how they came up with their 27 1 values. 2 And, so, there's been a continuance or a 3 hearing that's been rescheduled for July 20th by the 4 Local Assessment Appeals Boards in Humboldt County. 5 So, we still have one more step in this 6 process with that board to determine what the 7 outcome in this is going to be. 8 So -- 9 MR. PHILLIS: That would be the Assessment 10 Appeals Board's judgment as to value? 11 MR. GILMAN: Right. 12 MR. PHILLIS: The things that I'm currently 13 addressing are the Assessor following Revenue and 14 Taxation Code. 15 I feel that that's not the Appeals Board's 16 jurisdiction to do that. 17 MR. GILMAN: Right. And I'm going to 18 follow up on that based on what you've provided me 19 today. 20 MR. PHILLIS: And also in the -- as long as 21 we're on the Appeals Board, Rule 313 (c)(3), non 22 enrollment of the purchase price has a different 23 requirement than what most of the other -- the other 24 portions have. 25 And Rule 313 (c)(3), a change in ownership 26 and the Assessor has not enrolled the purchase price 27 and the applicant has provided the change of 28 ownership statement required by law, the Assessor 28 1 bears the burden of proving by a preponderance of 2 the evidence that the purchase price, whether paid 3 in money or otherwise, is not the full cash value of 4 the property. That's all it says. 5 So, if they don't prove that -- if they 6 don't have any proof it is the purchase price. 7 That's how read it. Maybe -- maybe I don't know 8 what I am reading, but that's how I read it. 9 MR. RUNNER: Do we have a copy? 10 MR. HORTON: Okay. Member Ma. 11 MS. MA: So, Mr. Phillis, I just want to 12 clarify a couple of things. 13 So, per the deed of sale you paid $153,806? 14 MR. PHILLIS: Yes, 153,806. 15 MS. MA: Okay. And then it says that the 16 unpaid debt, together with the cost, was 245,000, 17 but that had nothing to do with you? 18 MR. PHILLIS: Correct. 19 MS. MA: You just paid the 153 -- 20 MR. PHILLIS: Correct. 21 MS. MA: -- as the fair market value? 22 MR. PHILLIS: Correct. 23 MS. MA: Okay, we're going to come meet 24 with you also. 25 MS. HARKEY: I just -- 26 MR. PHILLIS: I'm from Humboldt County. 27 MR. GILMAN: It was worth the trip. 28 MS. MA: I'll try and be there. 29 1 MS. HARKEY: I just wanted to say that I 2 wish everybody as thorough and concise as this. 3 This is absolutely a beautiful record of 4 the law and the references. You have examples. 5 And if we had this, I think taxpayers would 6 have a much better shot. 7 So, I do wish you luck, 'cause this is 8 clearly delineated, underlined. I mean, we can't 9 read all this, but when you go to the point and it's 10 yellow -- ask my staff, yellow anything I really 11 need to see. Put it up front and yellow it. 12 MR. PHILLIS: Well, I have a Suzuki, so I 13 like yellow. 14 MS. HARKEY: Well, it's all good. No, this 15 is excellent -- excellent work and I wish you luck. 16 I can't even imagine where some of these 17 values came from, but maybe we'll find out. 18 MR. PHILLIS: All right, thank you for 19 hearing my presentation. I appreciate it. 20 Now are you going -- is he going to be able 21 to correspond to me on this? 22 MR. GILMAN: Yes, I'll explain. 23 We will respond to you with a written 24 response. And then, based on a follow-up in terms 25 of what the outcome of this is, you'll receive a 26 letter with how we end up resolving this issue. 27 MR. PHILLIS: Okay, but -- 28 MR. GILMAN: But outside of that, there's a 30 1 also a couple of other moving parts with Ms. Ma's 2 office. 3 MR. PHILLIS: -- what I would like too is 4 -- all this is public information. 5 I would like access to any correspondence 6 that you have with the Assessor. If you have 7 correspondence, I want -- I would like copies of 8 everything that's done. Obviously, I don't trust 9 her. 10 So, if you could do that -- you do have my 11 e-mail address. 12 MR. GILMAN: If we don't, we'll get it. 13 MR. PHILLIS: All right. I thank you guys 14 for your time. 15 MR. GILMAN: All right, thank you. 16 MR. HORTON: Thank you for appearing 17 before us today. 18 Mr. Gilman? 19 MR. GILMAN: Okay, let's get back to our -- 20 I believe we have Mr. Cris O'Neall in the audience 21 that was scheduled to speak. 22 Is Mr. O'Neall here? 23 Okay. 24 MR. HORTON: Mr. Gilman, I would like to 25 get Mr. O'Neall's concern on the record, if that's 26 possible. 27 Do you -- is that available to you? 28 MR. GILMAN: I -- you know, he was very -- 31 1 see what do we have? 2 It has to do with -- Mr. O'Neall was here, 3 was he not? Board Proceedings -- 4 MS. RICHMOND: Yes, he was. 5 MR. GILMAN: -- did he sign in? So, he may 6 have stepped way, but he's not available. 7 Mr. O'Neall is a -- 8 MR. HORTON: We do recognize that you're 9 representing Mr. O'Neall -- 10 MR. GILMAN: Yes. 11 MR. HORTON: -- or speaking on his 12 behalf -- 13 MR. GILMAN: Yes, right. 14 MR. HORTON: -- but just -- 15 MR. GILMAN: The issue on the record. 16 MR. HORTON: Yes. 17 MR. GILMAN: Basically it has to do with 18 recorded title to real property is now usually held 19 in the name of corporate subsidiary. 20 In many cases it is the subsidiary that 21 exhausts its administrative remedies by filing and 22 prosecuting any Assessment Appeals Board hearings, 23 challenging their assessment values. 24 The subsidiary property taxes are usually 25 paid its corporate parent or even another subsidiary 26 in the same family corporation. 27 From what I understand, basically if a 28 subsidiary pays the taxes and they file a request 32 1 for a local appeal assessment hearing and they don't 2 prevail, they cannot -- if they go -- the next step 3 of the process to go -- is to go to the County Board 4 of Supervisors to have them hear the appeal on the 5 claim for refund. 6 If they don't prevail, they don't have the 7 right to go to court because they didn't pay the 8 tax. So, that's the gist of it. 9 So -- but if there's anybody else in the 10 audience, Mr. Chairman, as we have done in the past, 11 that would like to come forward and speak on a 12 property tax matter, I would welcome them now, with 13 your permission? 14 MR. HORTON: Sure. 15 Hearing and seeing none, we will receive 16 and file your presentation. 17 MR. GILMAN: Thank you. That concludes the 18 Taxpayer Bill of Rights hearing for Culver City, 19 June 23rd, 2015. 20 Thank you. 21 MR. HORTON: Thank you, Mr. Gilman, for all 22 your work in championing on behalf of the taxpayers 23 as well, as your outreach -- continuous outreach to 24 taxpayers through the various seminars and 25 throughout the State of California as working with 26 all of the Members here to make sure that they have 27 access -- 28 MR. GILMAN: Yes, sir. 33 1 MR. HORTON: -- to you and that you are 2 engaging and proactive in trying to resolve their 3 issues. 4 Thank you so very much. 5 MR. GILMAN: Real pleasure for working for 6 all of you. 7 ---o0o--- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 34 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 June 23, 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 34 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: JULY 21, 2015 18 19 20 ____________________________ 21 JULI PRICE JACKSON 22 Hearing Reporter 23 24 25 26 27 28 35