1      BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION

            2                        450 N STREET

            3                   SACRAMENTO, CALIFORNIA

            4    

            5    

            6    

            7    

            8                    REPORTER'S TRANSCRIPT

            9                        MAY 25, 2016

           10    

           11    

           12    

           13    

           14                    CHIEF COUNSEL MATTERS

           15                        J RULEMAKING

           16           J1 READOPTION OF PROPOSED AMENDMENT TO 

           17     DIESEL FUEL TAX REGULATION 1432, OTHER NONTAXABLE 

           18           USES OF DIESEL FUEL IN A MOTOR VEHICLE

           19    

           20    

           21    

           22    

           23             

           24    

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           26             

           27                      REPORTED BY:  Kathleen Skidgel 

           28                                     CSR NO. 9039




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            1                        P R E S E N T

            2             

            3    For the Board               
                 of Equalization:           Fiona Ma, CPA
            4                               Chairwoman
                 
            5                               Diane L. Harkey
                                            Vice Chair
            6    
                                            Jerome E. Horton
            7                               Member
                 
            8                               Sen. George Runner (Ret.)
                                            Member                  
            9    
                                            Yvette Stowers 
           10                               Appearing for Betty T. 
                                            Yee, State Controller 
           11                               (per Government Code 
                                            Section 7.9)
           12    
                                            Joann Richmond 
           13                               Chief 
                                            Board Proceedings      
           14                               Division
                 
           15    For Board of
                 Equalization Staff:        Kevin Smith
           16                               Tax Counsel III
                                            Legal Department
           17    
                                            Bradley Heller
           18                               Tax Counsel IV
                                            Legal Department
           19    
                 
           20                          ---oOo---

           21    

           22    

           23    

           24    

           25    

           26    

           27    

           28    





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            1                               450 N STREET

            2                               SACRAMENTO, CALIFORNIA

            3                               MAY 25, 2016

            4                          ---oOo--- 

            5             MS. MA:  Ms. Richmond, please introduce our 

            6    next item.  

            7             MS. RICHMOND:  Our next item this morning 

            8    are our Chief Counsel matters.  Item J Rulemaking.  

            9    J1 Readoption of Proposed Amendment to Diesel Fuel 

           10    Tax Regulation 1432, Other Nontaxable Uses of Diesel 

           11    Fuel in a Motor Vehicle.  

           12             MS. MA:  Okay, welcome.  To the Department, 

           13    please introduce yourselves and begin your 

           14    presentation.  

           15             MR. SMITH:  Good morning, Chairwoman Ma and 

           16    Members of the Board.  I'm Kevin Smith from the 

           17    Board's Legal Department.  With me today is Bradley 

           18    Heller, also from the Board's Legal Department.  

           19             We are here today to request that the Board 

           20    vote to readopt the proposed amendments to Diesel 

           21    Fuel Tax Regulation 1432, Other Nontaxable Uses of 

           22    Diesel Fuel in a Motor Vehicle.  

           23             In December 2015, the Board adopted the 

           24    amendments and submitted the rulemaking file to the 

           25    Office of Administrative Law.  However, during OAL's 

           26    review of the rulemaking file, OAL staff concluded 

           27    that Board staff's reference to data from other 

           28    states and internal data in the initial statement of 




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            1    reasons did not provide a sufficient factual basis 

            2    to support the safe-harbor percentages contained in 

            3    the proposed amendments.  

            4             Therefore, staff has addressed OAL's 

            5    concerns by adding documents containing the data 

            6    from other states and internal data to the 

            7    rulemaking file and providing interested parties 

            8    with an additional opportunity to comment on the new 

            9    documents.  

           10             Staff has not received any comments 

           11    regarding the new documents and staff has not made 

           12    any changes to the amendments the Board adopted in 

           13    December 2015.  

           14             Thank you.  

           15             MS. MA:  Okay.  Thank you.  

           16             Members, any comments?  Questions?  

           17             MR. RUNNER:  Move adoption.  We'll try it 

           18    again.  

           19             MS. HARKEY:  Second.  

           20             MS. MA:  Okay.  Mr. Runner moves, Ms. 

           21    Harkey seconds, to adopt staff recommendation.  

           22             Without objection, motion carries.  

           23             MR. SMITH:  Thank you.  

           24                          ---oOo---

           25    

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            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 May 25, 2016 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 4 constitute 

           14    a complete and accurate transcription of the 

           15    shorthand writing.

           16    

           17    Dated:  May 31, 2016

           18    

           19    

           20                           ____________________________

           21                           KATHLEEN SKIDGEL, CSR #9039

           22                           Hearing Reporter

           23                              

           24                              

           25                                

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           28             




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