1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 DECEMBER 16, 2015 10 11 12 13 14 ADMINISTRATIVE SESSION 15 ITEM N 16 CONSENT AGENDA 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 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 16 Division 17 For Staff: Randy Ferris Chief Counsel 18 Legal Department 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 DECEMBER 16, 2015 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: Our next matter is the 7 Administrative Session. Item N Consent Agenda. 8 We have N1, Retirement Resolution for Susie 9 Leon. 10 The Members of the Board wish to extend 11 their sincere and grateful appreciation to retiree 12 for her dedicated service to the State Board of 13 Equalization and to the State of California, their 14 congratulations on her well-earned retirement, and 15 best wishes to her and her family for continued 16 success, happiness, and good health in the years to 17 come. 18 MR. HORTON: Congratulations to, uh -- to 19 Ms. Susan Leon. She was a trainer in the Culver 20 City district and a recruiter as well, doing an 21 exceptional job over the years as an auditor. 22 I chuckle because she actually had a 23 retirement celebration and we -- a lot of folks went 24 to the retirement celebration. Then she went back 25 and recalculated and figured the retirement date was 26 too soon and pushed it back a little bit. 27 So, I only share that to encourage all of 28 us that are contemplating retirement, make sure we 3 1 get the date right. 2 Ms. Richmond, the other items? 3 MS. RICHMOND: We also have Item N2 4 Approval of Board Meeting Minutes for October 27, 5 2015, October 28, 2015, November 17-18, 2015. 6 MR. FERRIS: Noting that the Board just 7 amended the minutes of November, through that 8 rescission vote. So, whatever motions you make 9 should take that into account. 10 MR. HORTON: Okay. 11 Member Ma. 12 MS. MA: Okay. Now I have another 13 question. 14 MR. HORTON: Mm-hmm. 15 MS. MA: This is December and we're voting 16 to approve the minutes of October and November. 17 MR. FERRIS: Yes. 18 MR. HORTON: Do you want -- 19 MS. MA: Yet we send out letters before the 20 draft minutes come out, yet we officially vote to -- 21 I mean, and that's why we caught the motion, and my 22 request to rescind is because after the minutes came 23 out is when there was a lot of confusion on what was 24 written and what was oral. We had to watch the 25 tapes again. 26 So I'm just asking that if -- is this the 27 time that we're officially approving the minutes? 28 MR. FERRIS: Yes. 4 1 MS. MA: For October/November. 2 MR. FERRIS: That is correct. 3 MS. MA: And so -- 4 MR. FERRIS: Before that everything is just 5 a draft and it's subject to revision and input from 6 staff and Members' offices, to make sure that the -- 7 everyone is comfortable that the minutes are 8 accurate and properly reflect what happened in the 9 meeting. 10 And then, once all that vetting has 11 happened, and it takes some time to do that, it 12 comes officially onto the agenda like it is now. 13 MS. MA: Okay. So, I'm just trying to 14 avoid what happened last time. 15 MS. HARKEY: That's a rare occurrence. 16 MR. HORTON: Well -- 17 MS. MA: Do we get -- the staff -- did we 18 get copies of the draft minutes -- 19 MS. RICHMOND: Yes. 20 MS. MA: -- to approve? 21 MS. RICHMOND: They're sent to each 22 office. 23 MS. MA: Did each office approve it, like 24 verbally or in writing -- 25 MS. RICHMOND: In writing. 26 MS. MA: -- to the clerk. Each office did. 27 MS. RICHMOND: Yes. 28 MS. MA: So did my office do that? 5 1 MS. HARKEY: Yeah, you don't (inaudible). 2 MR. HORTON: They're nodding yes. 3 MS. MA: Within three days. Okay. All 4 right. 5 I'm just kind of confused because we 6 approve the minutes so far after. 7 MS. RICHMOND: And you're thinking, I 8 think, of the preliminary record of Board action 9 which is posted immediately following the meeting. 10 MS. MA: Yes. 11 MS. RICHMOND: Which is different than 12 these minutes. 13 MS. MA: Than the draft minutes. 14 So -- okay. So after this meeting, what do 15 you post? You post the preliminary. 16 MS. RICHMOND: Correct. 17 MS. MA: And then you send out draft 18 minutes? 19 MS. RICHMOND: Yes. 20 MS. MA: Within three days? 21 MS. RICHMOND: No. Those take a little 22 longer. 23 MR. FERRIS: Because sometimes they have to 24 consult the, uh -- the video record of the hearing. 25 It's much more detailed than the preliminary record 26 is. 27 MS. MA: But then the letters to the 28 taxpayer goes out within a day or two. 6 1 MS. HARKEY: That's statutory. 2 MR. FERRIS: Correct. Yeah. 3 And staff does listen to the motions very 4 carefully in drafting those letters as well. And I 5 think that Grant -- Mr. Thompson was representing 6 that they did listen carefully and -- and -- and put 7 into the letter what was said in the literal 8 language of the motion. 9 MR. HORTON: Possibly you can share the 10 reason that's the case and the Rules of Appeals? 11 MR. FERRIS: Right. 12 So especially with franchise and income tax 13 matters, it's a different rule on finality than it 14 is for business taxes. But by statute, the Board's 15 action becomes final within 30 days of the motion 16 carrying. 17 And so it's -- it's really important to 18 give the franchise and income tax appellants, and 19 Franchise Tax Board, the opportunity to have a full 20 30 days to understand what the motion was and to 21 prepare whether or not they want to file a petition 22 for rehearing. 23 So we don't want to cheat them on that very 24 limited 30-day window that they have. So, by 25 regulation, we're obligated to get that information 26 to them in a very timely fashion. 27 MR. HORTON: Another wrinkle to that is 28 that was actually a Section 40 case. So even after 7 1 we go through all of that, it still isn't final 2 until the Section 40 comes back. 3 MR. FERRIS: No. The default rule is that 4 it's a summary decision. 5 MR. HORTON: Summary decision. 6 MR. FERRIS: And, therefore, it would 7 become final. It will become final -- well, now it 8 won't because the Board rescinded its vote. 9 MR. HORTON: Right. 10 MR. FERRIS: But if the Board hadn't 11 rescinded, it would have become final tomorrow, even 12 though it is a Section 40 opinion. 13 MR. HORTON: Okay. 14 So, there's a motion -- there's a motion on 15 the table to adopt the consent calendar, noting the 16 modification to the -- the rescinding of the vote 17 pursuant to the Rob Lowe case and encouraging that 18 the minutes so reflect such and giving the Board an 19 option to -- to bring those -- that -- those minutes 20 back if in fact that is not the case. 21 Is that sufficient, motion? 22 MS. HARKEY: Sounds good to me. I'll 23 second. 24 MS. RICHMOND: There was no motion, sir. 25 MR. HORTON: No, I'm asking for it. I'm 26 just -- 27 MS. HARKEY: He's making it. So moved. 28 MR. HORTON: Sort of defining it. Sort of 8 1 to make it easier. 2 MS. HARKEY: Unless you're moving it. 3 MR. HORTON: Moved by Member Harkey. 4 Second by Member Ma. 5 Without objection, Members, such will be 6 the order. 7 MS. RICHMOND: And that's for Items N1, N2, 8 N3 and also N4. 9 MR. HORTON: N1, N2, N3. N5 -- 10 MS. HARKEY: All those N's. 11 MR. HORTON: -- we -- 12 MR. FERRIS: And N4. 13 MR. HORTON: -- will take up separately. 14 MS. RICHMOND: N5. 15 MR. HORTON: And N5, all of them, yeah. 16 Why not. 17 Ms. Richmond -- 18 Oh, unless there's objection. Anybody want 19 to look at N5? 20 No. All right. 21 ---oOo--- 22 23 24 25 26 27 28 9 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 December 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 9 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: December 21, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 10