1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 9 REPORTER'S TRANSCRIPT 10 SEPTEMBER 16, 2015 11 12 13 14 15 16 BUSINESS TAXES COMMITTEE 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 For the Board of Equalization: Diane L. Harkey 3 Chair 4 Jerome E. Horton Member 5 Sen. George Runner (Ret.) 6 Member 7 Fiona Ma, CPA Member 8 Yvette Stowers 9 Appearing for Betty T. Yee, State Controller 10 (per Government Code Section 7.9) 11 12 Joann Richmond Chief 13 Board Proceedings Division 14 15 For the Department: Susanne Buehler Chief 16 Tax Policy Division 17 Kevin Smith Tax Counsel III 18 Legal Department 19 Lisa Sherrod Business Taxes 20 Administrator III Special Taxes Department 21 Andrew Kwee 22 Tax Counsel III Legal Department 23 24 ---oOo--- 25 Speaker: Fran Mancia Vice President 26 Government Relations MuniServices 27 28 ---oOo--- 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 SEPTEMBER 16, 2015 4 ---oOo--- 5 MR. HORTON: Ms. Richmond, what is our next 6 matter? 7 MS. RICHMOND: Our next matter is the 8 Business Taxes Committee. Ms. Harkey is the Chair 9 of that committee. 10 Ms. Harkey. 11 MS. HARKEY: Thank you. We have two issues 12 before the Businesses Taxes Committee. And Ms. 13 Buehler and her staff will be presenting. 14 MS. BUEHLER: Good morning. I'm Susanne 15 Buehler with the Sales and Use Tax Department. 16 We have two agenda items for your 17 consideration today. We will take each agenda item 18 and their respective action items separately before 19 moving to the next. 20 With me for Agenda Item 1 is Mr. Kevin 21 Smith from our Legal Department and Ms. Lisa Sherrod 22 from our Special Taxes and Fees Department. 23 Staff requests your approval and 24 authorization to publish proposed amendments to 25 Special Taxes and Fees Regulation 1432, Other 26 Nontaxable Uses of Diesel Fuel in a Motor Vehicle. 27 The proposed amendments define terms, 28 provide examples of qualifying equipment, and 3 1 provide safe-harbor percentages for nontaxable uses 2 of diesel fuel. 3 A person still has the option to claim a 4 refund using percentages other than the safe-harbor 5 percentage by submitting a study and obtaining Board 6 approval. 7 We would be happy to answer any questions 8 you may have on this topic. 9 MS. HARKEY: Are there any questions from 10 Members? 11 MR. RUNNER: Move staff recommendation. 12 MS. STOWERS: Second. 13 MS. HARKEY: Have a motion and a second. 14 Do we have any opposition? 15 Okay. So moved. 16 MS. BUEHLER: Thank you. 17 Joining me for Agenda Item 2 is Mr. Andrew 18 Kwee from our Legal Department. 19 Staff requests your approval and 20 authorization to publish proposed Prepaid Mobile 21 Telephony Services Regulations 2460, 2461 and 2462 22 and proposed amendments to Emergency Telephone User 23 Surcharge Regulations 2401, 2422 and 2413. 24 The proposed and amended regulations 25 interpret, clarify, and make specific the statutes 26 regarding the application of prepaid mobile 27 telephony services surcharge and the local charges 28 to the purchase of prepaid mobile telephony 4 1 services. 2 We do have speakers on this agenda item and 3 we'd be happy to answer any questions you may have 4 after their presentations. 5 MS. HARKEY: Thank you. 6 Do we have anyone from the public that 7 wishes to speak? 8 ---oOo--- 9 FRAN MANCIA 10 ---oOo--- 11 MR. MANCIA: Good morning. 12 MS. HARKEY: State your name and -- 13 MR. MANCIA: Yes, thank you. 14 Good morning, Madam Chair and Members. My 15 name is Fran Mancia. I'm with MuniServices, and 16 we're here today on behalf of our company and our 60 17 California public agency utility tax compliance 18 service clients. 19 In total, our clients represent 70 percent 20 of the annual local utility user tax revenue 21 generated in the State of California. MuniServices 22 and public agencies are keenly interested in the 23 proper, timely and cost effective implementation of 24 these proposed regulations related to prepaid 25 telephony services which are before you for your 26 consideration. 27 For the past several years, we've worked 28 closely with Members, staff, the public, industry 5 1 and others to work the bills and the process 2 through, in a very collaborative and positive 3 manner. And we're very appreciative of everybody's 4 effort in that -- to that regard. 5 We've been especially focused recently on 6 the contracting process between locals and the BOE, 7 and we're confident the collaborative effort of all 8 those involved will result in a positive outcome for 9 the state and local representatives. 10 So we strongly support the Alternative A 11 and urge the Business Tax Committee to approve and 12 authorize publication of the proposed prepaid mobile 13 telephony service regulations, as well as the 14 regulations related to emergency telephone user 15 surcharge. 16 Thank you for your consideration. 17 MS. HARKEY: Thank you very much. 18 Any other from the public? 19 Members, any comment? 20 MR. HORTON: Um, Madam Chair. 21 MS. HARKEY: Yes. 22 MR. HORTON: I -- I just wanted to 23 encourage all those involved to continue the work 24 that they're doing. I think it's, uh -- it's been a 25 yeoman's effort over the last year to get the word 26 out, get the legislation passed and so forth. 27 On the recommendation side is, there are a 28 number of cities that did not make the first 6 1 deadline. I'm pleased that a significant number of 2 'em did. But those that didn't, and they have a 3 second bite at the apple in December, let's do what 4 we can to -- to, uh -- to make sure that they are 5 aware and they're engaging. And those who didn't, 6 let's disclose to the direct carriers, as well as 7 the retailers, those potential cities that may not 8 be -- may not have qualified for the first quarter, 9 so that they can avoid a potential 17200 issue. 10 MS. HARKEY: Thank you very much. 11 Any other comments? 12 No. 13 Thank you very much for your work; it's 14 greatly appreciated. This has been going on for 15 quite a while and trying to get this together with 16 all the parties. So I -- I really appreciate the 17 effort. It seems like we've got everyone on board 18 and I know that staff is working diligently to be 19 sure that everything comes in, in a timely fashion. 20 Thank you very much. 21 MR. RUNNER: Move staff recommendation. 22 MR. HORTON: Second, approval of proposed 23 regulation and amendments thereto. 24 MS. HARKEY: We have a first and a second 25 and -- or a motion and a second. 26 Any opposition? 27 Okay. So passed. 28 Thank you very much very, very much. 7 1 MS. BUEHLER: Thank you. 2 MS. HARKEY: That ends the session of the 3 Business Taxes Committee. 4 ---oOo--- 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on September 16, 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 8 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: September 24, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 9