1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 AUGUST 21, 2018 8 9 10 11 12 13 ITEM G1 14 REVISIT PETITION TO AMEND PROPERTY TAX RULES 302, 15 THE BOARD'S FUNCTION AND JURISDICTION; 16 305, APPLICATION; 17 305.1, EXCHANGE OF INFORMATION; 18 305.2, PREHEARING CONFERENCE; 19 AND, 323, POSTPONEMENT AND CONTINUANCES 20 21 22 23 24 25 26 27 REPORTED BY: Jillian M. Sumner 28 CSR NO. 13619 1 1 P R E S E N T 2 3 For the Board Equalization: 4 Honorable George Runner Chair 5 Honorable Fiona Ma 6 CPA, Vice Chair 7 Honorable Jerome Horton Third District 8 Honorable Diane L. Harkey 9 Fourth District 10 Yvette Stowers Appearing for Betty T. 11 Yee, State Controller (per Government Code 12 Section 7.9) 13 Joann Richmond Chief 14 Board Proceedings Division 15 For Board of Equalization Staff: Henry Nanjo 16 Chief Counsel 17 Dean Kinnee Executive Director 18 David Yeung 19 Chief County-Assessed Properties 20 Division 21 Public Comments: Chuck Leonhardt Plumas County Assessor 22 President California Assessors' 23 Association 24 Marc Aprea Principal 25 Aprea & Micheli 26 Ernest J. Dronenburg, Jr. San Diego County 27 Assessor/Recorder/Count Clerk 28 2 1 Public Comments Troy Van Dongen Cont'd: Chair 2 Marin County Assessment Appeals Board 3 John McKibben 4 California Association of Clerks and Election Officials 5 Edward Yen 6 General Counsel Office of the Assessor 7 Los Angeles County 8 Marie LaSala Law Office of Marie A. LaSala 9 Santa Barbara, California 10 ---oOo--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 AUGUST 21, 2018 4 ---oOo--- 5 MR. RUNNER: Okay. We're going to move 6 forward to Item G1. 7 MS. RICHMOND: Yes. Next is item G1. We're 8 going to revisit the petition to amend Property Tax 9 Rules 302, the Board's Function and Jurisdiction; 10 305, Application; 305.1, Exchange of Information; 11 305.2, Prehearing Conference; and 323, Postponement 12 and Continuances, in light of CATA's August 8th, 2018 13 letter. 14 And we do have several speakers. 15 MR. RUNNER: Okay. 16 Mr. Nanjo, you want to set us up here or -- 17 MR. NANJO: Sure. So as the Board may 18 remember at the July meeting, we had -- Member Ma 19 brought as an L Item a suggestion or ask, if you 20 will, petition by CATA to make some changes to the 21 property tax rules. 22 At that time, the Board -- we had a 23 discussion about considering that as a petition to 24 amend property tax rules, and the Board directed the 25 Legal office to, quote/unquote, "post haste." Try to 26 do a memo analyzing the issues and providing the 27 recommendation to the Board. 28 Unfortunately, there are a lot of issues. 4 1 There are some constitutional issues that are being 2 raised that we are having to analyze. So 3 unfortunately, we were not -- Legal was not able to 4 have the memo ready by this date. But we are on 5 target to have it ready for the Board for the 6 September meeting. 7 In the meantime, toward the beginning of 8 August, CATA also formally sent in a petition for -- 9 to amend property tax rules. As the Board Members 10 may know, that typically has a 30-day clock on it for 11 us to either approve or deny. 12 In discussions with CATA representatives, 13 they were very cooperative and have agreed -- as I 14 understand it, have agreed to waive that requirement 15 so that we can provide a proper memo to you to 16 analyze it. And the Board can take it up in 17 September. 18 But I will let Mr. Aprea address that. 19 MR. RUNNER: Okay. So I guess at this point 20 if I can kind of see if we can all be on the same 21 page. This is kind of a discussion -- a continued 22 discussion. 23 MR. NANJO: Correct. 24 MR. RUNNER: In regards to this particular 25 issue, we already have asked you to move forward with 26 it at our last meeting. 27 MR. NANJO: Correct. 28 MR. RUNNER: And so this will just continue 5 1 that and provide more information as you continue 2 with your work that will be presented back to us in 3 September. 4 MR. NANJO: Correct. 5 MR. RUNNER: Okay. Okay. 6 And I'm going to have Mr. Aprea start at 7 that point, and then we'll -- 8 MR. APREA: Mr. Chair -- 9 MR. RUNNER: -- hear form the assessors. 10 MR. APREA: -- Members of the Board, on 11 behalf of the Board of the California Alliance 12 Taxpayer Advocates, we want to thank you and your 13 staff for allowing us to be here with you. 14 To address the item that Mr. Nanjo raised, 15 on Friday the 17th, Mr. Nanjo brought together two of 16 his attorneys, Richard Moon and Julia Himovitz. 17 Mr. Moon participated by phone, Ms. Himovitz was 18 present at his office. In the room we had one of 19 CATA's members, who is attorney Chris O'Neall, and 20 Mike Middleton who is here with me today, in person 21 and by phone. 22 Another attorney/member of CATA is 23 Peter Michaels. And the President of CATA, Sean 24 Kelley. 25 We went through our August 8th letter 26 providing factual basis for the reg. package, as well 27 as reviewing the statutory authority that we believe 28 allows us not only to bring the reg. package forward, 6 1 but the basis for each regulatory change. 2 At the conclusion of a nearly 90-minute 3 meeting, Mr. Nanjo asked that CATA waive the 4 requirement under Government Code 11340.7 that 5 mandates that the BOE has 30 days from receipt of a 6 petition to take action on the petition. 7 And we asked that Mr. Nanjo, in that, assure 8 us that CATA's petition will be acted on at the BOE 9 September 25, 2018 meeting. And if the BOE grants 10 the petition in whole or in part, any public hearing 11 required to effectuate that Board action under the 12 APA will be held in 2018 and at the earliest possible 13 date. 14 Mr. Nanjo indicated that while he is going 15 to provide his best and good faith effort, that the 16 calendar is controlled by the Board and by the Chair. 17 And so we will stipulate that we are waiving 18 our 30 days with the understanding that we'll have an 19 opportunity for the Board to determine what to -- 20 what to do on September 25 in terms of publishing the 21 proposed regs for -- for comment, and to bring that 22 back to the Board before the end of the year. 23 MR. RUNNER: Okay. And I think for those of 24 us, as we talked about it last year, I think we have 25 a -- we have a very keen interest in getting this 26 resolved by the end of the year. 27 MR. APREA: Yes, thank you. 28 MR. RUNNER: And so if everybody is on 7 1 target for that, that's what we want to be able to 2 accomplish. 3 MR. APREA: So, Mr. Chair and Members of the 4 Board, I think that our presentation that we've made 5 before you on the July 24 hearing addresses all the 6 items that are included in our August 8th letter. I 7 don't think there's any value in going through each 8 and every item. 9 I do want to, however, just for purposes of 10 setting the table, review with the -- with the Board 11 how we got here from -- just sort of some key 12 elements so that we understand how we got here and 13 why this reg. package is -- is pending. 14 And so I'm going to go back about four years 15 ago in which the California Alliance Taxpayer 16 Advocate -- Advocates initiated an informal process 17 with a number of county assessors across the state. 18 And it was a tax -- it was an assessor 19 outreach program in which we wanted to sit down with 20 assessors, identify with them issues and concerns 21 that we had, and at the same time, invite the 22 assessors to raise any issues that they may have with 23 the profession. And so that there would be a 24 communication back and forth. 25 Regrettably, those informal meetings did not 26 result in any resolution of the issues that are 27 before you today. 28 And so back in September of 2016, we 8 1 addressed a letter to Mr. Horton who was the Chair of 2 the Property Tax Committee at the time, copied the 3 rest of you. And the California Assessors 4 Association asked that we meet with them to try to 5 resolve these issues so that if any changes could be 6 brought forward, that they have the benefit of that 7 kind of an exchange. 8 And while there was one conference call, it 9 was later -- we were later told that the participants 10 on that call, although it included the then president 11 of the association and several large counties who are 12 on -- on that call, that that was an unauthorized 13 call, and that we would have to submit a letter to 14 them formally requesting a meeting. And we did so. 15 And then we're told that we would have a 16 meeting sometime in June. And despite repeated 17 requests as to when that might be scheduled, nothing 18 was forthcoming. 19 And so we submitted a letter to you again on 20 July the 7th. And we testified a year ago at this 21 very hearing. Because I remember it was -- we 22 testified during the taxpayer advocate portion of the 23 hearing. 24 And all of you direct -- directed and 25 expressed support for a interested parties process. 26 And, in fact, Mr. Horton, who was very direct, asked 27 that the -- that it be an expedited interested 28 parties process with the purpose of bringing forward 9 1 recommendations in early 2018. 2 As I think it's been pointed out before, 3 there was an informal meeting in December. We were 4 told there was going to be no interested parties 5 process, and that there was -- and that there wasn't 6 any need for regulatory changes. 7 We submitted a letter to you in late January 8 expressing our concern that there was going to be no 9 interested parties process. And we testified, I 10 believe, at the February meeting, in which we pleaded 11 with you all that, Look, you said it was going to be 12 an IP process. There wasn't any. And that that 13 matter, you know, be made to go forward. 14 So we did have a meeting in April. There 15 was a four-hour discussion. I think it was rather 16 exhaustive of most, if not all, of the issues. And 17 then nothing happened. 18 And so we -- I guess the -- in summary, if 19 we knew then, back in late September of 2016, what we 20 know now, we would not have gone through the process 21 that we went through. And we would have proposed a 22 regulatory package shortly thereafter. 23 The analogy I would make is that oftentimes 24 in -- whether it's in regulatory circumstances or 25 legislative circumstances -- there's a stakeholder 26 process of some sort or another. People have 27 discussions. And some people come at it with 28 different motivations. Some are sincere; and others, 10 1 perhaps, are not. And that it's only when a proposal 2 is on the table that people get serious. 3 And I'm happy to report that the reg. 4 package that's been put forward -- thanks to all of 5 you, and to the Board Members at CATA who put forward 6 the taxpayer petition -- for the first time there 7 seems to be a real desire to engage in some 8 interaction and exchange by all parties. 9 And I don't mean to suggest that we've 10 reached agreement and that there's a kumbaya moment 11 afoot. But I will say that there has been, in 12 fact, an -- that folks have reached out from the 13 assessor community, from others in saying, All right. 14 Look, we're not going to agree on everything. But 15 here are some things that we want to talk with you 16 about. 17 And so I want to thank you all. Because I 18 have seen more activity since July 24 than I've seen 19 in the preceding two years. And I want to thank you 20 all for that. 21 And what I'd like to do is I'll just stop 22 here. We have with us a number of folks. I'd like 23 to introduce them for you. 24 And so on my far right is Sean Keegan. Sean 25 is the Chair of the California Alliance of Taxpayer 26 Advocates. He's a long-time practitioner. He is not 27 a lawyer. So we'll stipulate to that. And so he 28 won't be responding to legal questions. 11 1 But, really, if there are questions that 2 require a -- what it's like being a tax advocate, 3 Troy Van Dongen, who is a lawyer with the firm of 4 Winston & Strawn as you know from the last meeting, 5 is the Chair of the Marin County Assessment Appeals 6 Board. 7 Also Albert Zamarripa is also a 8 practitioner. He practices in the San Francisco Bay 9 Area. 10 And to my immediate right is Mike Middleton 11 from San Diego County. And he has been involved in 12 this process from the very beginning and provided a 13 lot of the scholarship, and a lot of the examples of 14 letters that have, I think, underscored the points 15 that we've made with regard to the exchange of 16 information in other matters. 17 So what I'd like to do is just stop. 18 If there are questions by any of the Board 19 Members, we're happy to respond to them. Certainly 20 we welcome the comments made by the assessor and 21 others -- the Assessors Association and others, but 22 we'd like to reserve the opportunity to respond to 23 anything that they may say. 24 I don't intend to go in an argument back and 25 forth. I think that will come up as we make our way 26 to the September 25 meeting. But if we think there 27 are factual errors or that perhaps the matter isn't 28 quite as we perceive it, we'd like to have the 12 1 opportunity to respond. 2 MR. RUNNER: And I think -- I think 3 procedurally, if the Members are okay, I think what 4 we'd like to do is hear from the assessors in terms 5 of a general statement. 6 And then I think what would be best for us 7 and most useful -- at least for me, and I'll see 8 where the other Members are -- would be for us to 9 just kind of start walking through what are the 10 suggestions that CATA has come up with. And what are 11 the -- at least from the assessors point of view, 12 then why they are problematic, or -- I think we 13 actually have some comments from the Clerks 14 Association, too, and what needed to be changed, 15 what -- what their concerns are so that we can kind 16 of use that as our discussion point. 17 I would assume at that point we would have 18 assessors and clerks over here helping us understand 19 that. 20 And then responses, then, would be available 21 then from CATA and the folks to kind of help give 22 clarity, or what their concerns, or why they don't 23 think it's a concern. 24 Is that okay to proceed that way? 25 MR. HORTON: Well -- 26 MR. RUNNER: Member Horton. 27 MR. HORTON: Mr. Chair, thank you very much 28 for that recommendation. I think it's an excellent 13 1 recommendation, but I think we ought to defer until 2 the September meeting to accomplish those 3 objectives. 4 MR. RUNNER: The objectives -- I'm sorry -- 5 the objectives of? 6 MR. HORTON: Of going through the various 7 different recommendations, the merits of those 8 recommendations. 9 And I only rec -- I only suggest that 10 because the Legal counsel has yet to provide their 11 legal opinion as to what statute, what's more 12 appropriate relative to an LTA and so forth in the 13 process. 14 But what I would like to hear -- I mean, my 15 own personal individual preference would be a 16 description of what the process is. Because, 17 historically, the interested parties process has been 18 driven by staff. And staff would actually do the 19 work that we're talking about doing now. Would have 20 been done well in advance and submitted. Staff would 21 have -- would have had an analysis that would have 22 been submitted. And that would have been the focal 23 point of the discussion. 24 So all parties -- 25 MR. RUNNER: Mm-hm. 26 MR. HORTON: -- would have had some 27 understanding of what the legal parameters are, and 28 some understanding of the merit and the principles 14 1 and so forth involved in the recommendation as to 2 what the problems are. 3 That didn't happen for -- I'm sure we can 4 speculate as to what those reasons are. So -- but 5 now we are in this process by -- provided by law 6 appropriately. 7 And I want to thank CATA for bringing it 8 forward, the recommendations, and putting it on the 9 table. And the next step in my mind would be to have 10 a legal analysis so that we don't get into disputes 11 about what should be statute -- what should be 12 accomplished through the statute, what should be 13 accomplished through LTA, what should be accomplished 14 through the rulemaking process. And we actually may 15 be able to even expedite some of these -- 16 MR. RUNNER: Yeah. 17 MR. HORTON: -- in the LTA process. 18 MR. RUNNER: Okay. I -- I'm probably going 19 to want some discussion on some of the language. 20 MS. HARKEY: Member Runner. 21 MR. RUNNER: Hang -- just a minute. 22 On some of the language. Because I think in 23 my discussions I had with assessors and whatnot, I do 24 have questions that I'd like to have at least 25 reviewed here. Which will at least satisfy me on 26 some issues that are going to come before us that 27 way. 28 And you're right, we won't have our legal 15 1 analysis. But we're gonna have plenty of time, then, 2 at the meeting for that to be provided, then, at the 3 next meeting. 4 Yes. 5 MS. HARKEY: I'm just -- I'm more -- 6 actually more in line with Member Horton only because 7 I know that the assessors and CATA are working 8 through a list of issues. And then I think this 9 Board will get down to the more thorny issues that 10 can't seem to be resolved. 11 I was understanding -- talking to my county 12 assessor, Mr. Dronenburg, who is sitting in the 13 audience here at the dais. He has been very actively 14 involved. His office has been very actively involved 15 working with all of you, or with Mr. Aprea, or 16 somebody to try to -- and -- and the other assessors, 17 to try to resolve some of the issues. And then to 18 move on to the other issues for which we probably 19 would need a legal opinion at least as a basis to 20 start. 21 And so I'd like to ask Mr. Aprea if that's 22 okay, rather than -- I'm afraid that if we open 23 this up -- the only reason -- I'm afraid they'll 24 start back and forth, and then we'll harden lines 25 again without having the information. 26 MR. RUNNER: Well, again, that would not be 27 the intention of the Chair to try to harden lines. 28 MS. HARKEY: Yeah, I understand that. But 16 1 I'm just -- I am concerned. Because I think they are 2 moving down a path. And Mr. Aprea can tell me if 3 that's true or not, or if he would like the 4 discussion opened. I'm certainly not going to deny 5 anyone their -- their -- 6 MR. APREA: Ms. Harkey, and through the 7 Chair, I'm happy to answer any and all or none of 8 your questions. 9 MR. RUNNER: Right. Right. I think -- I 10 think that would be -- I think that's where we're 11 going to be going. So -- 12 MR. APREA: But I also want to make it clear 13 that in terms of, you know, the analysis that your 14 staff is -- is preparing, this -- you know, this -- 15 we're not going to substitute for that. 16 MR. RUNNER: Right. 17 MR. APREA: And -- but I think -- 18 MS. HARKEY: Right. 19 MR. APREA: -- what we are prepared to do is 20 to provide you -- and that's why we brought these 21 practitioners here specifically, is what we're -- and 22 we've discussed these before. 23 MR. RUNNER: Mm-hm. 24 MR. APREA: But to the extent that you want 25 to engage in any conversation about that, what led -- 26 you know, what are the practices that led to this? 27 And I -- I -- I failed to mention at the 28 outset, but I will now, that there are really two 17 1 guiding principles that drive everything that is in 2 our petition and in the proposed regs. And that is, 3 one, to insure uniformity. 4 And I think that -- because taxpayers are 5 treated, not a little bit, but very differently from 6 county -- 7 MR. RUNNER: Right. 8 MR. APREA: -- to county. And while we may 9 disagree on how to gain that uniformity or what that 10 uniformity might look like, no one can dispute that a 11 taxpayer in one county is treated very differently 12 than in another. And the assessors themselves have 13 so stated. 14 In other words, they have provided how they 15 treat taxpayers in one county versus how they treat 16 taxpayers in another. 17 And so there is no dispute that that -- that 18 there is a vast chasm in terms of how taxpayers are 19 treated from county to county. 20 And No. 2 is to insure due process for the 21 taxpayer. And I think that, again -- and I want to 22 assure this committee and the audience that the 23 witnesses that appeared here today for the Taxpayer 24 Bill of Rights hearing were not folks that we brought 25 to this -- to this body. These are citizens who have 26 found that their due process rights have been 27 abridged. They have -- and this is not unique that a 28 right to a hearing is summarily denied. And that 18 1 that ultimately denies a taxpayer their due process. 2 And we are asking that this body insure that 3 taxpayers' due process rights are not only respected, 4 but that they have easy access to getting their case 5 heard. 6 MR. RUNNER: Okay. 7 MR. APREA: And we, I think, have seen 8 examples of the very small taxpayer, as well as large 9 taxpayers, having those rights abridged. 10 MR. RUNNER: Okay. Thank you. 11 And we'll go ahead and hear from the 12 assessors. 13 MR. LEONHARDT: Good afternoon, Chairman 14 Runner and Honorable Board Members. Thank you for 15 making time for us this afternoon. 16 My name is Chuck Leonhardt. I serve as the 17 assessor of Plumas County and as the President of 18 California Assessors Association. 19 The great state of California is comprised 20 of 58 separate and distinct counties. Each has its 21 own unique geological, social and economic 22 conditions. Our forefathers recognized this fact in 23 the California Constitution Article XIII Section 16, 24 which states the county board of supervisors shall 25 adopt rules of notice and procedures for those boards 26 as may be required to facilitate their work and 27 insure uniformity in the processing and decisions of 28 equalization petitions. 19 1 It was intended that local jurisdictions had 2 the flexibility to adopt rules of notice and 3 procedure that met the unique needs of their 4 jurisdiction. 5 In California there are also 58 elected 6 assessors and 58 boards of equalization, each with 7 respective duties to -- respective duties to assess 8 and equalize property. 9 Local boards adopt local boards of 10 procedures that meet local needs while still 11 following the laws as outlined in the state 12 constitution, statutes, laws and regulations, and as 13 promulgated by BOE. 14 In the great state of California there are 15 58 superior court systems. Each system adopts local 16 rules that are reflective of local conditions. 17 Visiting attorneys and judges must learn the local 18 rules and follow them when arguing and presiding 19 cases in local cases. 20 While local rules may differ from county to 21 county, the laws of the great state of California are 22 administered in each county equally. With local 23 assessment appeals boards -- as with local assessment 24 appeals boards, courts recognized one size does not 25 fit all. 26 When we consider the magnitude and diversity 27 between California counties, one might look at the 28 likes of Alpine County, which has 2,486 locally 20 1 assessed parcels on their tax roll. The total value 2 is approximately $669 million. 3 Los Angeles County contains 2 million 365 4 thousand, plus or minus, parcels. About 951 times 5 the number of parcels in LA -- in Alpine County. 6 The current assessed value of Los Angeles 7 County secured parcels is 1 trillion 293 billion 8 700 thousand. And I'm rounding. Okay. Or 9 approximately 2,000 times larger than Alpine County. 10 In a recent letter to the Board of 11 Equalization, Los Angeles County stated that for 12 fiscal year 2017/'18 they had 19,179 assessment 13 appeals filed. And that's down from 40,000 appeals 14 filed during the great recession years. 15 Plumas County contains 25,500 parcels total. 16 In fiscal year '17/'18 we had three assessment 17 appeals filed, down from 100 in the great recession. 18 The state constitution and statutes and 19 board promulgated rules and regulations are intended 20 to create a frame of work of law that treats 21 similarly situated taxpayers with similar -- and 22 similarly under the law, just as with the courts. 23 Both the courts and local boards of 24 equalization are given the authority to adopt local 25 rules to provide administrate -- to administrate 26 those laws based on local conditions. 27 The above illustrations make it clear that 28 one size does not fit all. Los Angeles County cannot 21 1 adapt their system to that of Alpine. Alpine County 2 would go bankrupt in attempting to administer the 3 Los Angeles County assessment appeals system. 4 The Board, as the state constitution, must 5 recognize the need to recognize and promote diversity 6 in the administration practices to accommodate local 7 conditions. 8 As I told the Board on February 27th and 9 July 24th of this year, matters as important as 10 property tax rule promulgation and amendment must be 11 fully vetted by staff and enjoy the full vetting of 12 all the interested parties, large and small. 13 Introducing or condoning those who would 14 circumvent the full interested parties process by 15 presenting unvetted property tax rule proposals 16 undermines your staff, assessors, clerks of the 17 board, local government, and average taxpayers. 18 In this case, these proposals are tendered 19 by a small group of special interest who represent 20 large corporations. The group would tell you that 21 taxpayers are not able to have their day at hearing. 22 And that's simply not true. 23 Assessors believe all taxpayers, large and 24 small, should be treated fairly in the process. 25 Likewise, taxpayers, large and small, should do their 26 part to provide the necessary information to 27 adjudicate their case. 28 There is no emergency here. You have to -- 22 1 you have time to facilitate proper vetting and 2 interaction by all interested parties, not just that 3 of CATA. 4 As I ponder this situation, I must ask 5 myself a few questions. Why is this a race to adopt 6 one-sided set of rules that are fraught with 7 unintended consequences? 8 Are there other alternatives, such as 9 handbook revisions, letters to assessors, or review 10 and guidance by survey teams that would accomplish 11 the same purpose? 12 It's been said that there's no reason to 13 create another law just because you don't believe 14 someone is following the current law. 15 The Board, through their staff, may have 16 options available to address concerns that have been 17 tendered by CATA and by the other interested parties. 18 Those options have not been considered prior to this 19 jump to the rulemaking process. Simple modifications 20 and guidelines of administration may make the 21 rulemaking process unnecessary. 22 There are more than a dozen other items in 23 existence in the current interested parties process 24 that CATA's proposal does not address. If the Board 25 makes decisions on the CATA proposals now without 26 considering all the issues, what are the unintended 27 consequences to balance -- to the balance of the 28 process? 23 1 Chris O'Neall in Los Angeles County are 2 currently in litigation in two cases concerning the 3 use of confidential information. 4 Historically, the Board has not adopted or 5 considered rulemaking matters that are under 6 litigation. Thus, awaiting for the Court to weigh in 7 on such issues. 8 This litigation -- is this litigation one of 9 the motivating forces driving CATA to circumvent the 10 standard interested parties process? Shouldn't the 11 Court decide the issue first? 12 There are a number of areas in the 13 interested parties process where assessors and CATA 14 have the opportunity to find common ground. Based on 15 a recent polling of sample counties, I determined of 16 the 13 general areas that are subject to CATA's 17 suggested rules, 5 are items that CAA members agree 18 with. 19 There's one item CAA believes the clerk of 20 the board should decide; there's one item that has 21 universal opposition by assessors, exposure of 22 confidential information; and six items where 23 individual counties have issues, but where objection 24 was not unanimous. 25 When you take a look at the issues from that 26 perspective, resolving these items with proper 27 vetting by year-end is doable. 28 As for confidential information, well, the 24 1 Court should make that determination. 2 Board Members and assessors have a common 3 public responsibility. We are elected by the people 4 of our county or district with the expectation that 5 we will be committed to fair treatment to all 6 taxpayers. 7 I weigh that responsibility very heavy in my 8 conduct, and I'm sure you do as well. That's why 9 whether I like the final results or not, I'm invested 10 in working with the BOE staff to complete the 11 interested parties process as originally scheduled in 12 a manner where all possible interested parties have a 13 seat at the table and a fair opportunity to share 14 their opinions. Intentionally bifurcating the 15 process to appease one special interest group is 16 simply inappropriate. 17 My friend Mr. Aprea enjoys making an issue 18 about how long he believes this process has taken. 19 Mr. Aprea is not elected by the people. He is 20 compensated by a special interest group that have no 21 concerns about the unintended consequences to others 22 that may result from adopting property tax rules in 23 haste. 24 The bottom line, Board Members, as 25 assessors, have a higher responsibility. We are 26 invested in making sure that all parties are included 27 in the process, and that the consequences of proposed 28 actions are fully considered. 25 1 We are also invested in making sure that all 2 issues to the process get equal opportunity to be 3 heard. 4 It is for these reasons and all the 5 unanswered questions I've mentioned before that I ask 6 you today to deny CATA's petition and remand the 7 matter back to staff and the already interested 8 parties process. Which is very similar to what 9 Mr. Horton spoke about earlier. That that normally 10 happens before we get to this place. 11 I am confident and committed to delivering 12 five -- at least five of these issues back to you as 13 soon as possible. 14 CATA will work -- CAA will work with CATA 15 and other interested parties on the remaining items. 16 As for confidential information, that item 17 belongs with the Court. 18 In summary, my survey made it abundantly 19 clear to me that the fastest way for the Board of 20 Equalization and assessors to find themselves in the 21 538 action is by meddling in a matter that's already 22 under litigation. 23 As a small county assessor, what I've 24 learned is the cheapest way to find your legal 25 opinions is to do it on somebody else's dime. 26 Thank you very much for your time this 27 afternoon. 28 MR. RUNNER: Okay. 26 1 I don't know if Assessor Dronenburg has some 2 additional thoughts to -- 3 MR. DRONENBURG: Mr. Chairman, thank you. 4 MR. RUNNER: Mm-hm. 5 MR. DRONENBURG: Nice to see all my old 6 friends up here. 7 MR. RUNNER: Yeah. 8 MR. DRONENBURG: My main reason for coming 9 today was to ask for the 30-days extension. I 10 believe we're working closely -- 11 MR. RUNNER: Mm-hm. 12 MR. DRONENBURG: -- with the -- we have 13 58 cats over here, and we're trying to come up with 14 one idea to sit down with one person and come up with 15 a resolution. I think we've got 56 of the cats 16 together here, and we're working on the last two. 17 But I believe at the end of the 30 days, we 18 will be able to sit down and work out a great portion 19 of these. And then you can focus on the ones that 20 are contentious. And so that's why I would ask for 21 the 30 days. 22 MR. RUNNER: Okay. 23 MR. DRONENBURG: I would salute Mr. -- what 24 is your name -- Aprea for his agreeing to the 30 25 days. And it would have saved me a plane ticket if I 26 knew about it yesterday. But agreeing to the 27 extension, because I think we can get a lot done in 28 the next 30 days, and get down to the -- at least to 27 1 the ones we can't disagree on. 2 MR. RUNNER: Okay. 3 Member -- I think Member Harkey had a 4 comment. 5 MS. HARKEY: Yeah, I -- I just, you 6 know -- I -- that's my suggestion is that we do the 7 30 days. I mean, if at the end of 30 days there's 8 something that's really in contention, then that item 9 can go back to interested parties. But at least 10 we'll have some of these things carved out so that we 11 don't have to keep circling. 12 Because I know that San Diego has been 13 working diligently with other counties. And I'm sure 14 the other counties have been working with each other. 15 I know the small counties are fully engaged. And -- 16 at least I'm hearing that. And they're trying to get 17 this resolved. 18 Everybody just kind of wants to get back to 19 their business. But they understand there's some 20 areas that, you know, need to be corrected. Some of 21 them can be corrected by a form letter that's 22 standardized that makes it real simple. Others are 23 going to need a little leeway because of the size of 24 the county and the staffing. And I think we're all 25 amendable to allowing those things. 26 And I just -- I just think if they can 27 whittle these away in the next 30 days then we always 28 have an option of going back to the IP process if 28 1 there's something that's still a bone of contention. 2 But I think they're working really well, as 3 we would expect elected officials to do. You know, 4 we've got an issue, we're bringing it forward. We 5 know you're all elected. We're very happy to have 6 you there. And we just want to be sure that we don't 7 have a back and forth. 8 Because the special interest groups that 9 we're calling special interest groups are actually 10 the taxpayers of California that pay all of our 11 salaries. So I want to be sure those special 12 interest groups are -- are represented. And I do 13 thank the advocates here for doing so. And I thank 14 the assessors for coming to the table. 15 And -- and thank you, Mr. Dronenburg, in 16 particular for coming up here today and testifying 17 for us. 18 Thank you. 19 MR. RUNNER: Member Stowers. 20 MS. STOWERS: Thank you. 21 Process -- well, first, Mr. Aprea and CATA, 22 okay, we -- we were in the IP process. It wasn't 23 moving fast. And there was some delays, and we only 24 had one meeting. 25 So you guys exercise your right to file a 26 petition to change the rules. Totally within your 27 right. Now that we're at a petition stage, it is my 28 understanding that our Legal counsel has to provide 29 1 an analysis and come back with recommendations. 2 So I don't know if we can pull it back into 3 the IP process as much as I would like for it to be 4 there. I just don't think we can get there. 5 With respect to your proposals -- and I am 6 hearing what you guys are saying that there may be 7 some meeting of the minds, some agreement on some of 8 the items. I don't want to delay this any further 9 if -- if there's an agreement. But I don't think we 10 truly have an agreement on some of the major issues. 11 Some of the issues where CATA is feeling 12 like -- whether it's been true or not -- but where 13 they feel that due process is being violated. So I 14 don't know if that's -- if you guys have come to that 15 agreement. 16 So what I would like, if possible -- I wrote 17 down there's five issues that you guys have agreed 18 to. Can you give us a high level of what these five 19 issues are? So at least I can kind of check it off 20 on my list. 21 MR. RUNNER: Member Stowers, can I -- before 22 we start that process, Member Ma has got to leave. 23 MS. STOWERS: Okay. 24 MR. RUNNER: And so she wanted to make a 25 comment. And then we'll maybe come back at that 26 point. 27 MS. STOWERS: Mm-hm. 28 MR. RUNNER: Does that work? Okay. 30 1 MS. MA: Thank you. 2 I'm pleased to see that we are starting to 3 work together. And I know we have gotten a letter 4 from the county clerks with specific changes that 5 they would like. 6 I know I've been talking to some of the 7 assessors. And they also are working on language, 8 knowing that we started with something as a road map. 9 My office -- I'm more than happy to 10 facilitate a meeting in my office with all the 11 parties if that makes it easier. Depending on what 12 comes out. 13 I'm sorry I have to leave right now. But we 14 are -- are more than happy to convene that meeting 15 before the next Board Meeting. 16 MR. RUNNER: Okay. And before we go -- 17 MS. HARKEY: Before you go, can we have a 18 vote so that we can -- 19 MR. RUNNER: I really don't think we need to 20 vote on anything. Because we're scheduled right now 21 to have this come back to us in September. 22 MS. HARKEY: Okay. So it doesn't need a 23 vote? 24 MR. RUNNER: No, I think we're on target for 25 this just to come back. So I think we are -- 26 MS. HARKEY: Okay. 27 MR. RUNNER: We are good. 28 MS. HARKEY: I was under the 31 1 understanding -- 2 MR. RUNNER: Okay. 3 I think -- Member Horton, did you make a 4 general comment before we go to the specifics that 5 Member Stowers is talking about? 6 MR. HORTON: Sure. Let me just encourage 7 this. You know, I understand the dichotomy that 8 exists from one county to another, and the challenge 9 that could occur if we set hard-line rules and 10 regulations that don't have enough flexibility to 11 allow the constitutional -- the elected officials to 12 do what they -- within their jurisdiction. 13 I understand the jurisdictional issue as 14 well. And I think it's important that we all 15 understand the jurisdictional issue so that we know 16 what authority we have, and we know the parties that 17 we're speaking of. In this case, whether it is the 18 AAB, or whether it's the assessors, or whether it's 19 the county clerks. And in order to somewhat identify 20 what the problem might be, at the same time what the 21 solution might be. 22 But there's one thing that is uniformly the 23 same, and that's due process is just due process at 24 the end of the day. Creating a system that provides 25 due process is -- it is -- is going to fit everyone, 26 you know. It's a fairness -- it's an equity issue. 27 And so -- but I think the inherent challenge 28 that we may have here is -- and we now have a 32 1 starting point that CATA has made a presentation. 2 I'm presuming that the assessors are making an 3 evaluation of their presentation -- I mean, their 4 position. And at the same time are going to advance 5 whatever nuances or additional information that they 6 want to advance. 7 But what we don't have is staff's 8 recommendation. Which I think should have come 9 forth, as I said earlier, in the beginning. That 10 should have been really what was driving this process 11 is a recommendation from staff as to what their 12 professional opinion is, their legal opinion is. And 13 that's their job in my opinion. 14 And so I'd like to ask them as we go 15 through -- well let me -- let me address another 16 issue. 17 The interested parties process appears to 18 have failed for a number of reasons. And I think 19 it's failed because staff has failed to drive that 20 process to a resolution by putting these facts that 21 we're now asking for on the table at an earlier date. 22 And so hopefully we'll be able to get there. 23 But the hearing process, in order to ensure 24 that we have mutual input, that all the interested 25 parties have an opportunity to voice their opinion, 26 that the hearing process be somewhat of a bifurcated 27 process that allows for that, whether it's in 30 days 28 or before the end of the year, that it allows for 33 1 input from all of the sides, all of the interested 2 parties in the issue. 3 And so -- but the reality is someone's got 4 to put something on the table. If you don't, the 5 cooks don't start cooking. It's just the name of the 6 game. If you don't like what's on the table, you 7 start preparing your own meal. And then at the end 8 of the time -- at the end of the day, hopefully we 9 all sit down and consume together. Hopefully. 10 So there are a number of areas that I think 11 we need to end this process is, what's practical? We 12 need to consider what's practical. 13 For example, the 90-day provision may not be 14 practical for a small county. It may actually put 15 the taxpayers at a disadvantage. They may need more 16 than that. And so there has to be some leeway, some 17 language that allows a level of flexibility. 18 And I think that's staff's responsibility to 19 try to come up with a recommendation that addresses 20 those larger concerns. The legal component. What's 21 within our legal jurisdiction? What can the Board of 22 Equalization -- I, you know -- I'm asking leading 23 questions. I have a pretty good idea of what should 24 happen. But I don't want to drive it that way. 25 What's the legal responsibilities of all the 26 parties involved? And in that legal process you 27 actually identify the different parties, and you 28 identify their roles. You identify the legislative 34 1 roles, and you identify their practical roles. 2 Then you have the -- the legislation 3 evaluation and this notion of uniformity in how it 4 may not -- may or may not work. I'd like to hear 5 from staff. 6 And, Mr. Chair, I'd like to assure all the 7 parties that the process will be a equitable process. 8 Which I know it will be. I believe it will be. But 9 this has been going on for far too long. 10 And let's -- and quite frankly, it's the 11 Members' responsibility. No Member here is -- is -- 12 in my opinion, no Member here is advancing the agenda 13 of any party. What we're now advancing is a process. 14 A process by which the mutual input of all the 15 parties will be heard. And we'll have an opportunity 16 to sort of evaluate that. 17 MR. RUNNER: Mm-hm. 18 MR. HORTON: And at the end of the day, 19 we're charged with the responsibility of making a 20 decision. And I, for one, am going to do that. 21 MR. RUNNER: Okay. I'm going to -- 22 MS. STOWERS: Well, if you -- 23 MR. RUNNER: Member Stowers. 24 MS. STOWERS: If you -- I would like to at 25 least get an idea of what you are in agreement with 26 if you guys are prepared to share. If not, we can 27 move on. 28 MR. RUNNER: Before we do that real quick, I 35 1 think it's -- I think that's an important issue. I 2 think as part of the -- I think part of the thing, at 3 least what I'm hearing, is that not all the counties 4 are on the same page. And so we've got agreements 5 from some counties and not other counties. 6 We have -- so I think that is part of the 7 problem that we're going to have here. And that's 8 why I'm not sure, for instance, you know, if the 9 Association has taken a position on this, or if 10 the -- let me ask you this, is the Association the 11 one who's negotiating? Or is it a group of assessors 12 that are negotiating? 13 MR. LEONHARDT: Well, I think the 14 Association has certain issues, which we have 15 determined to be common goals of each assessor. We 16 also have issues that affect different counties 17 differently -- 18 MR. RUNNER: Right. 19 MR. LEONHARDT: -- because of local 20 conditions that are had. 21 MR. RUNNER: So -- so again -- 22 MR. LEONHARDT: Part of the -- 23 MR. RUNNER: Let me ask again, is it the 24 Association who is negotiating, or is it -- or is it 25 a group of assessors that are negotiating? 26 MR. LEONHARDT: Well, I would say that the 27 Assessors Association is here at the table, and we're 28 ready to negotiate. However, we represent 58 36 1 assessors. 2 MR. RUNNER: Right. 3 MR. LEONHARDT: And they have some somewhat 4 different interests. So as we look at some of these 5 issues, something that doesn't affect me in Plumas 6 County could have a huge impact on Los Angeles 7 County. 8 MR. RUNNER: Right. 9 MR. LEONHARDT: So my -- my job in sitting 10 in this chair and the reason they pay me the big 11 bucks -- 12 MR. RUNNER: Yeah. 13 MR. LEONHARDT: -- is because I have to try 14 to balance, and I have to report back to all of these 15 people. Okay. 16 MR. HORTON: By the way, for those who 17 are -- 18 MR. LEONHARDT: And move those things -- 19 MR. RUNNER: And, again, let me ask you 20 again, from my discussion, and that is I just heard 21 that there's this ongoing group of people who are 22 having a discussion in order to find some common 23 ground. So that we find that common ground, and as 24 we come together in September, my question is, is the 25 Association that group, or is it a group of 26 assessors? 27 MR. LEONHARDT: The Association will take a 28 position on the issues that come forward. The 37 1 Association is waiting for the Board Legal staff. 2 And I think we all agree that we need to see what 3 their legal analysis -- 4 MR. RUNNER: Okay. Okay. I think what I'm 5 hearing -- 6 MR. LEONHARDT: -- is before we go much 7 farther. 8 MR. RUNNER: I think what I'm hearing you 9 say is it's not the Association that is working with 10 Mr. Aprea and CATA, it is individual -- is a group of 11 individual assessors who are trying to kind of find 12 common ground to which then hopefully the Assessors 13 Association can buy off on too. Is that a fair 14 assessment? 15 MR. LEONHARDT: I think the -- at least from 16 my perspective, I think the assessors are unclear as 17 to what the process is at this point. We understood 18 the interested parties process when we were in the 19 interested parties process. Now we've taken part of 20 the issues out of the interested parties process, we 21 let some of the issues into the interested parties 22 process. And so normally, as Mr. Horton shared -- 23 MR. HORTON: Who's "we," by the way? 24 MS. HARKEY: No, we -- we haven't -- 25 MR. HORTON: We haven't done this. 26 MS. HARKEY: -- done so. 27 MR. LEONHARDT: Well, okay. 28 MR. HORTON: Go ahead. Go ahead. 38 1 MR. LEONHARDT: Done that through his 2 petition. He's bifurcated this process. And staff 3 has not analyzed -- 4 MR. RUNNER: Okay. 5 MR. LEONHARDT: -- the issues that are still 6 in the process, or -- and the issues that are outside 7 of the process. And we haven't looked at how they 8 interrelate with each other. 9 MR. RUNNER: Okay. Let me just clarify I 10 think where we are. And that is right now we're -- 11 we're going to go ahead and have this 30-day 12 extension of -- of -- of review. 13 There is a group of assessors, not the 14 Association, who are trying to find some common 15 ground with -- with the -- with the taxpayers. 16 And at the same time then, our Legal team 17 isn't doing the analysis on the material that has 18 been -- that is being talked about. 19 So that's the process that we're in. Is 20 that -- that clear? 21 MR. LEONHARDT: I would say that's a fair 22 analysis as I understand the process. 23 MR. RUNNER: Okay. Is that -- so -- so -- 24 do we have an agreement from the Association that 25 that's what the process is? 26 MR. LEONHARDT: That -- that appears to be 27 right. 28 MR. RUNNER: Okay. 39 1 MR. LEONHARDT: The Board -- 2 MR. RUNNER: Okay. So I think that's where 3 we want to go, and that's where we are right now. 4 MR. HORTON: Mr. Chair, if I may. 5 MR. RUNNER: Yeah. Go ahead, Mr. Horton. 6 MR. HORTON: I think I'd like to hear from 7 Mr. Nanjo as to what the -- the official process is 8 as far as the -- the requests for the rules. 9 MR. RUNNER: Okay. 10 MR. HORTON: And then maybe we can have some 11 conversation about a bifurcated process that gets us 12 there in a timely fashion that somewhat incorporates 13 the interested parties process with the rulemaking 14 process --which is not uncommon for the agency to do, 15 as Mr. Dronenburg can attest to -- for -- and because 16 if we do this in a vacuum on one side or the other 17 without removing the spin in the dirt, you know, 18 nothing's going to get cleaned. If you know what I 19 mean. 20 So, sir, please. 21 MR. NANJO: Yes. 22 Chairman Runner, Members of the Board, what 23 has happened -- and maybe I can provide a little bit 24 of clarity -- is there were a number of issues, as I 25 understand it, that were being discussed in the 26 interested parties process having to do with this 27 general topic. 28 MR. HORTON: Do we have -- not to interrupt 40 1 you. 2 MR. NANJO: Sure. 3 MR. HORTON: But do we have those issues? 4 Do we -- is -- has those issues been presented to the 5 Board and all the parties involved? 6 MR. NANJO: I don't -- I don't believe 7 they've been presented to the Board yet. 8 MR. LEONHARDT: No, they have not been 9 presented to this Board. 10 MR. NANJO: Right. This is the process. 11 This is the interested parties meeting that both 12 Mr. Aprea and the assessors have discussed. 13 What has happened is CATA has selected 14 several issues that were important to them, and 15 they -- and I think that's what the assessors mean by 16 they took that out of the interested parties process. 17 So in the midst of these interested parties meetings 18 where you're talking about a larger number of issues, 19 if it's fair to say -- and CATA can correct me if I'm 20 wrong -- they chose some important issues to them, 21 and they took that out of the process by going first 22 to Member Ma, and then bringing a petition to amend 23 property tax rules. And those are the issues that we 24 are looking at now. 25 MR. HORTON: So has -- has all the parties 26 agreed to disregard the issues that's not germane to 27 those presented by CATA? 28 MR. LEONHARDT: No. 41 1 MR. NANJO: That -- that has not happened 2 yet. 3 MR. HORTON: So who is going to reconcile 4 this? I believe staff should reconcile these 5 differences, put all the issues on the table for a 6 discussion, and then we can go to work. 7 MR. NANJO: Well, okay. So the challenge 8 there, Member Horton, is that CATA has crystallized 9 the issues that are in their petition. 10 The other issues that are not in their 11 petition are still, for lack of a better term, stuck 12 in neutral in the interested parties process. So I'm 13 not sure how you bridge that. 14 What Legal is doing is we were asked by the 15 Board specifically to look at -- to -- and this was 16 my recommendation was to treat what CATA presented as 17 a petition to amend tax -- property tax rules. So we 18 are looking just at what CATA has presented in their 19 paper. 20 MR. HORTON: Well, that -- that creates an 21 inherent conflict here, because -- 22 MS. HARKEY: I believe it's a legal 23 action. 24 MR. HORTON: I get it. But you've got 25 issues that are not being discussed. They're in this 26 neutral zone. So why not continue to discuss these 27 issues that CATA has not brought forth in the 28 interested parties process? Or have the assessors 42 1 submit a request to have their rulemaking under the 2 issues that they want to have it discussed. 3 But there has to be a way for all of these 4 issues to be taken up. We can resolve the issues 5 that CATA has presented through the process that 6 they've requested appropriately. But the other 7 issues, if they still remain resolved, we need a 8 concurrent process of some sort. 9 And, I mean, without recommending a process, 10 I'm asking Legal counsel for some direction, and I'm 11 asking the assessors as well as CATA for -- for some 12 direction. There are other issues out there. 13 They're not going anywhere. 14 MR. NANJO: So -- so if I may. I -- I'm -- 15 I want to make it clear, I'm not taking a side, I'm 16 not endorsing one methodology over another. But what 17 I will tell you is -- 18 MR. HORTON: Legally. 19 MR. NANJO: -- typically one of the 20 questions that were raised was what's our typical 21 process. 22 Well, Member Horton, you're absolutely 23 correct. Typically, the process is to go through an 24 interested parties process. The parties kind of 25 discuss issues, and then you -- they come to three 26 categories; issues that they agree on, issues that 27 they don't agree on, and issues that are kind of back 28 and forth. Their perspectives. Those are ultimately 43 1 under typical process after the interested parties 2 process brought to the Board. 3 And the Board then gives direction to staff 4 on how to go with each of those categories of issues. 5 In this case, what's happened is -- because 6 CATA has put this petition to amend property tax 7 rules while the interested parties process is going 8 on, they've taken a piece of what was being discussed 9 in the interested parties process and kind of 10 advanced that to this regulatory process. 11 So from that standpoint, the Board has 12 two -- a number of options. But some of your options 13 are you can either go forward with the CATA petition 14 and have the Legal team analyze that, which 15 will -- by definition, you'll have a bifurcated 16 process. You'll have those things going in front of 17 the other issues that are still in the interested 18 parties process. 19 Another option is you can take -- you can 20 put CATA's petition on hold, if you will, or deny it, 21 and put the issues back into the interested parties 22 process and try to develop all of them. 23 I suppose a third option, if you have 24 somebody who is willing to try to take the remaining 25 issues that are in the interested parties process and 26 put them into either a statutory or regulatory system 27 to try to catch up to the CATA process. 28 So those are kind of your options as I see 44 1 them. 2 MR. HORTON: Well, Mr. Chair, if I may. 3 MR. RUNNER: Again, just to clarify, though, 4 we're already in one of those. We've made a decision 5 in regards to that. 6 MR. NANJO: Yes. 7 MR. RUNNER: And if -- and if -- and if we 8 were to choose any of those other decisions -- other 9 directions, that would require another decision? 10 MR. NANJO: Right. 11 MR. RUNNER: Okay. 12 MR. NANJO: What you would have to do is you 13 would have to -- 14 MR. RUNNER: Right. 15 MR. NANJO: You know, depending on what you 16 decide to do you may have to sidetrack the CATA 17 petition. 18 MR. RUNNER: Right. 19 MR. HORTON: We're -- we're -- we're sooner 20 losing sight of why CATA filed the petition. I mean, 21 they filed the petition because in their opinion -- 22 in my -- and I don't want to -- I don't want to speak 23 for you, but in an opinion, the process was dragging. 24 And not necessarily by the assessors. 25 As I said earlier, I fundamentally believe 26 that staff should have provided more leadership in 27 this process early on. But I certainly appreciate 28 the staffing issues that we faced in the last few 45 1 months. 2 But that in itself is not an excuse. And so 3 we are where we are. I mean, the assessors could 4 file their own petition and start a process that they 5 want these other cases here heard. And we would have 6 to address it in 30 days would be concurrent with 7 September -- with the September meeting. Which is 8 another option. 9 I'm not recommending anything. I just 10 thought we'd put the other option on the table. 11 But we have to reconcile these different -- 12 these -- these differences that are out there or this 13 is never going to be solved. We can have a parallel 14 process as well. That the petition does not have to 15 stall. It can continue. We can address those issues 16 through the petition process. The interested parties 17 process can continue as well to address all the other 18 issues. And we can put a deadline on that process to 19 be concurrent with the hearing process so that all of 20 those issues will come before us in September. 21 It's work on everyone's part. But if you 22 want to get it done, that's what it's going to take. 23 That's work on the staff's part to -- in the 24 interested parties to assess, evaluate the various 25 issues under the parameters that I've set forth 26 earlier, and at the same time, concurrently deal with 27 the legal issues on -- on this side of the fence. 28 Otherwise, this is just going to drag itself on. 46 1 Even if we solve the CATA issues, we still 2 have the other issues of concern to the assessors. 3 And in the interest of equity and fairness, why pick 4 one over the other? 5 I mean, let's just do it all -- take care -- 6 it's been around for two years as they mentioned 7 before. 8 Thank you. 9 MR. RUNNER: Okay. Let me -- I've got folks 10 that want to speak out here. 11 Member Harkey, I'm going to go ahead and 12 let -- 13 MS. HARKEY: I'm just afraid we're getting 14 caught back in another bind again, Member Horton. 15 And I don't want to keep this spinning. 16 We have a request before us. CATA has 17 waived their 30 days to allow the process to continue 18 for us to get the proper legal analysis. The other 19 items can continue in the interested parties process. 20 There's nothing wrong with that. 21 MR. HORTON: Yeah, but -- 22 MS. HARKEY: But I don't know that we are 23 going to be able to get everything back before us in 24 September. And I want to be sure that these issues 25 that I think the assessors -- maybe not the 26 Association per se -- but the members of the 27 Association have been trying to get collectively or 28 agreed upon among themselves. Which is really what 47 1 we'd prefer. 2 You know, I -- I, quite honestly, think 3 everybody is adults. Everybody sees where there's a 4 problem and where there's not. And I think we'll 5 reach a consensus on a lot of these issues. 6 And then, you know, the other issues that 7 haven't been the major bones of contention can 8 continue through an IP process. There's nothing 9 stopping that. 10 But I really hesitate to delay this any 11 longer, because we are -- we are delaying our -- 12 we're -- I think we're advocating our responsibility 13 here. We've got a legal process in place. We have 14 a -- a -- a group that has agreed to waive their 15 30-day requirement. We are kind of rolling with a 16 process. And there's nothing stopping us from having 17 those other items go through the IP process. 18 MR. HORTON: Well -- 19 MS. HARKEY: I -- I just -- 20 MR. HORTON: Let me -- I don't think we said 21 anything differently. Just -- just to -- to 22 assure -- 23 MS. HARKEY: Okay. As long as we didn't say 24 anything differently -- 25 MR. HORTON: Yeah. 26 MS. HARKEY: -- I'm fine. 27 MR. HORTON: -- on -- on the same page. 28 MS. HARKEY: I just want to be sure. 48 1 MR. HORTON: It is a capacity issue. It is 2 a timing issue. It is something that the folks in 3 front of us have to kind of weigh in. 4 And, Mr. Runner, with permission, I see a 5 gentleman over there that wants to -- 6 MR. RUNNER: Yeah, actually I've got a 7 couple of them ready to go. 8 MR. HORTON: Okay. 9 MR. RUNNER: Mr. Aprea. 10 MR. APREA: So I'd like to address a number 11 of the statements made if I could. 12 I think there is a misunderstanding here 13 that somehow the reg. package that is before you is 14 radically different than the issues that we presented 15 to you, Mr. Horton, and to the Board in September of 16 2016. 17 The issues we presented to you then are the 18 same issues that are in the reg. package today. The 19 only difference is that there -- on the July 24 20 meeting you had that reg. package before you. And 21 there was a vote to go forward with that. And then 22 we formalized it with a petition by this organization 23 to the Board, which then triggers the -- the -- 24 MR. HORTON: Timelines. 25 MR. APREA: -- the timelines. And so -- and 26 the -- and the hearing process. 27 So I don't think there's this, you know -- 28 this -- we were discussing this large thing, and 49 1 we've now narrowed it down to just those -- you know, 2 those few items. That, I think, is -- would be an 3 inaccurate characterization of the difference. The 4 issues are the same, you know, two years later as 5 they were back in September of 2016. 6 I think the -- you know, the question has 7 been asked, you know, about, you know, why the regs 8 and why now. And that is because we were -- you 9 know, we were going nowhere fast. 10 And so I want to point out, and I gave the 11 history that I did, because -- and I'm not going to 12 name names. But there is a -- there is a -- there 13 are folks who are, you know, stakeholders to this 14 process, who have staked out a -- we're going to say 15 no to everything, and we're going to delay as much as 16 we can. And that was the mantra. And otherwise, I 17 don't know why after nine months we wouldn't have had 18 a meeting. 19 And so I think that it's important for you 20 to recognize that. That there was a -- a -- that 21 there were some parties to this process who didn't 22 want to engage. And I don't know if they were hoping 23 that we would go away, or it was just a way of 24 playing it out. 25 But the reg. package is before you for a 26 variety of reasons. But the overarching reason is 27 that not even the simplest thing, not even the 28 recommendation that Ms. Stowers made about a uniform 50 1 initial 441(d) letter, could be agreed to. 2 And there are folks who made the same 3 argument. We are independently elected. We're not 4 going to take direction from the Board, etc., etc. 5 And, again, I'm not putting this at 6 Mr. Leonhardt's feet. Because that was -- that was 7 before his time as the President of CAA. 8 But the point here is that it's important to 9 recognize the issues are the same; the process is 10 different. Because we've now initiated a rulemaking 11 package. We've stipulated that we're going to waive 12 our 30 days with the understanding that this matter 13 comes before you. 14 Now, to the extent that there is an issue 15 that hasn't been addressed or people want to address 16 differently, well, we've got the time between now and 17 September 25 to work those things out. 18 And just as whether it's an irregulatory 19 process or a legislative process, those things can be 20 worked out between all the interested parties. 21 To also clarify -- and I -- and I want to 22 make sure that this is clear -- CAA's lobbyist 23 reached out to me yesterday. And so it is not just a 24 county here or a county there, but a representative 25 from CAA reached out to me and said, "We want to work 26 with you." 27 There wasn't an agreement to file -- I had 28 no idea there were five issues. So I'm anxious to 51 1 hear what those five issues are. Because it would be 2 news to me as well. But there was a smattering of 3 issues that were raised. Some that were going to be 4 more difficult and so on. 5 But -- but I've also heard from individual 6 counties who said, "Look, you know what, we're not 7 going to be naysayers anymore. We're tired of this. 8 There are issues out there that do need to get 9 addressed. We're going to agree on some things, 10 we're going to agree that the issue needs to be 11 addressed, but we might want to do it a different 12 way. And there might be some issues which -- with 13 which we don't agree with you on, or can't find a way 14 to agree with you on in terms of resolving that 15 issue. But we're going to try." 16 And so I think I want to give you a sense of 17 the spectrum of where we are. 18 And so, Mr. Chair, I think the -- the issues 19 here are the same as they were in that letter that we 20 sent you in September of 2016. We are now just 21 manifest in a regulatory package that we're asking 22 you to put on the agenda to adopt in whole or in part 23 and to start the regulatory process. I mean, it's 24 not going to be September 25, you adopt all the regs, 25 game over. 26 MR. RUNNER: Right. 27 MR. APREA: It is really just -- that is 28 just the beginning of the process. 52 1 And so this Board will -- will continue 2 after January of 2019. If we got it wrong, if we 3 missed an issue, there will be other opportunities. 4 But we want you to address the issues in the 5 reg. package that are before you. Because we have 6 had these conversations one on one and so forth, but 7 there's never been any commitment to engage in 8 resolving them as I am seeing now. 9 Now, the proof will be in the pudding. 10 We'll see on September 25 if everyone's good 11 intentions match up to the work product. But you'll 12 be the ones to judge that and not us. 13 MR. RUNNER: Okay. 14 Mr. Dronenburg. 15 MR. DRONENBURG: I just wanted to be clear 16 on one thing that I said that might have been 17 misinterpreted. 18 And as I mentioned, I'm dealing with 58 cats 19 here. And I have got a good hold on, I think, a good 20 solid majority on these issues. Chuck went out and 21 measured responses. 22 Now, when we've said we've had discussions 23 with -- or these have been run by Mr. Aprea, they're 24 not -- they haven't been run by -- I just had to get 25 agreement within our folks. 26 Now our folks are agreeing to what he's 27 asking for, so I don't think he's going to all the 28 sudden change his mind when we say, "Yes, we'll 53 1 accept this, and we'll accept that, and we'll accept 2 this, and support you on that." 3 MR. RUNNER: Mm-hm. 4 MR. DRONENBURG: So even though we haven't 5 had a verbal discussion, we're saying we've agreed -- 6 I've got a consensus from a good group of assessors. 7 The Association has a timeline built in for accepting 8 things. We haven't been able to get this. And 9 that's why the Association has no formal position. 10 MR. RUNNER: Okay. 11 MR. DRONENBURG: But we can come back to you 12 with a significant number. 13 MR. RUNNER: Okay. 14 Mr. Van Dongen. 15 MR. VAN DONGEN: Chairman Runner and Members 16 of the Board, I'm Troy Van Dongen. I'm Chair of the 17 Marin County Assessment Appeals Board. And I'm a 18 property tax litigator. I've been litigating these 19 cases for many years. 20 And what you're seeing before you -- I'm not 21 a member of CATA just to be clear. 22 What you're seeing before you is a classic 23 case of what happens before any trial or any hearing 24 when the parties start narrowing the issues. They 25 start stipulating on -- on what can be -- you know, 26 where they can agree to. And they're going to narrow 27 the disputes that you have to deal with are what's 28 going to continue to drive that discussion is your 54 1 calendar. How you set the agenda is what's going to 2 happen between these parties here. 3 And I would encourage you to keep that 4 process going as quickly as you can. Because what 5 I've seen and what I've heard today is that without 6 your intervention, there was nothing happening. 7 MR. RUNNER: Okay. 8 Member Stowers, you -- you've actually made 9 a specific request. I don't know if given the nature 10 of this discussion if you -- 11 MS. STOWERS: I -- I don't -- you don't have 12 to go down the laundry list. I can wait until you 13 guys have a good agreement on what the issues you've 14 agreed to. 15 I do want to go back though to process. 16 Mr. Nanjo, you talked about the reg. process 17 and doing the analysis. I would like for you to 18 complete that analysis, and then I'm going to have a 19 question on the program as well. 20 But on your analysis, can you walk us 21 through what happens on September 25th when it's back 22 on our agenda? Whether we vote up or down. Let's 23 assume that we adopt some parts of it. 24 Do you have to do a revenue estimates for 25 any of these changes? Do you have data to do a 26 revenue estimate? 27 If not, can you start reaching out to 28 whomever you need to reach out to to get this revenue 55 1 estimate? And do you send over to the Office of 2 Administrative Law immediately? 3 Just lay it all out there. 4 MR. NANJO: Okay. 5 MR. RUNNER: Review the process for us. 6 MR. NANJO: Okay. I can review the process. 7 So part of -- a little correction to what 8 Mr. Aprea said, he is correct I have committed to 9 getting the -- you know, doing my best efforts. And 10 I'm on target to get the legal analysis to this Board 11 by the September meeting. 12 After that, we will try to get the public 13 hearing as quickly as possible if the Board so 14 chooses to go in that direction. 15 But I just want to make sure, crystal clear 16 here, I have very little control over that. There 17 are other parties and process, OAL. 18 As you mentioned, Deputy Controller Stowers, 19 there's a fiscal impact report that needs to be done. 20 It's known as a DOF Form 399, I believe. 21 So let me go through what I believe the 22 process will be. So between now and the September 23 meeting, my office is going to provide a analysis of 24 the regulatory proposal made by CATA. This will 25 include pros, cons, any legal concerns, if any. We 26 will give recommendations. We will also try to point 27 out whether there are other alternatives, you know, 28 rather than a regulatory change, statutory change, or 56 1 LTA, or something similar. 2 So we're going to try to lay out all that 3 information for the Board so they can make an 4 informed decision. And obviously the parties would 5 have a chance to weigh in at that meeting. 6 Assuming the Board selects either a portion 7 or all of CATA's proposed regulations to be moved 8 forward, then what would happen at that point is 9 assuming there's a vote of the majority of the Board, 10 they would direct Legal staff to prepare the notice 11 of rulemaking and the package for OAL submission. 12 So at that point we would put that together, 13 we would -- and we would proceed to get that 14 completed. 15 Prior to that -- and this is one of the 16 intangibles or unknowns -- prior to that being 17 submitted to OAL, we would have to fill out a Form 18 399, which is the fiscal impact report. 19 A little bit difficult for us to do that in 20 advance until we know what's going forward. Because 21 basically what that report is is our analysis of what 22 the fiscal impact, if any, of those regulatory 23 changes would be. 24 This is one of the areas where we have very 25 little control. Because I have heard DOF approve 26 that 399 form in as few as a few days. I've also 27 heard them take several months. And I have not, 28 talking to my colleagues, figured out a pattern or 57 1 any kind of rationale for why there's such a gap. 2 But that's -- that's kind of what we have to deal 3 with. 4 Once that form is completed, then we are 5 able to send that into OAL with the complete 6 rulemaking package. 7 Typically, as I understand the process, 8 after the September meeting and before we do the DOF 9 399 form, we will set our proposed regulations to the 10 Board just to make sure the Board's all in agreement 11 with it, they don't have any concerns. And then, 12 again, that's submitted to the OAL. 13 MS. STOWERS: Wouldn't they go to a 45-day 14 period? 15 MR. NANJO: Well, yeah. So once it's 16 submitted to OAL, then that opens the rulemaking 17 process and there's a 45-day period. 18 That's the public comment period. The 19 public can comment on it. Any comments that are 20 made, we are obligated to respond to those public 21 comments. 22 If before 15 days prior -- if -- if 15 days 23 prior to the termination of that 45-day period there 24 is a request for a public hearing, then we would have 25 to engage in a public hearing to let people speak as 26 well. So that's a possibility. 27 MR. RUNNER: Let me just ask for during 28 that -- during that time -- 58 1 MR. NANJO: Yes. 2 MR. RUNNER: During that time -- is the 3 process on hold during that period of time? Or are 4 they -- or does it continue down into a little track? 5 MR. NANJO: It continues down its track. 6 MR. RUNNER: Okay. 7 MR. NANJO: So -- yeah. 8 So then after that, once it goes to OAL, 9 then OAL will -- at that point, it comes back. They 10 will give any kind of comments, any changes we have 11 to make. 12 The regulations, as I understand it, will 13 come back to the Board for final approval. 14 Once those final forms are approved, then we 15 notify OAL, they get a copy of the Board's approval, 16 it's published, and then the regulations take effect 17 three -- 90 days after whenever that final approval 18 is, and it's published in the OAL rulemaking 19 calendar. 20 MS. STOWERS: Thank you. 21 MR. RUNNER: Okay. 22 MR. HORTON: The -- 23 MR. RUNNER: Okay. Member Horton. 24 MR. HORTON: And the other -- hopefully 25 everyone kind of understood that process. 26 So it's -- it's incumbent upon -- if we want 27 to resolve this this year, it's incumbent upon all 28 parties to kind of cooperate in that process. 59 1 If the -- I mean, a wrench can be thrown 2 into this process that will throw it off when it goes 3 to the OAL. A challenge to -- jurisdictional 4 challenge, legislative challenges by any party can 5 throw that off almost three or four months. 6 So let me just encourage the divorce 7 attorneys to leave the room, and we bring in some 8 reconciliation folks to try to get it done. 9 MR. RUNNER: Okay. 10 MS. STOWERS: I just want to -- 11 MR. RUNNER: Yes. 12 MS. STOWERS: Just one more quick -- yeah, 13 more process. Maybe I don't need you to say it, but 14 just for the record, I want to talk about, you know, 15 the IP process that we were in and all the issues. 16 Dean, are you prepared -- Mr. Kinnee, are 17 you prepared to talk about the timeline and the steps 18 that staff did or allegedly did not do? 19 MR. KINNEE: Perhaps if I could call 20 Mr. Yeung up. 21 MS. STOWERS: Yes. 22 So, Mr. Yeung, can you -- 23 MR. YEUNG: Yes. 24 MS. STOWERS: Just for the record, can you 25 give some clarification on what you guys did do as 26 far as once the Board directed to start the IP 27 meeting, what meetings you had, the formal/informal 28 meetings, and high level -- some of the issues that 60 1 were discussed at that -- maybe it was a March 2 meeting or April meeting -- 3 MR. YEUNG: Yes. 4 MS. STOWERS: And where -- and what you left 5 off at -- or where you left off at. 6 MR. YEUNG: Yes, Ms. Stowers. 7 My name is David Yeung. I'm Chief of the 8 Property Tax County-Assessed Division. 9 We had initial meeting in -- I'm sorry, I 10 gave a timeline last time. I -- I did not bring it 11 again this time. 12 But we did have a meeting in December. And 13 that was an informal meeting. After that, we asked 14 for -- we did ask for -- for comments. And we had 15 both -- we both -- we had interested parties submit 16 the comments to -- to staff. 17 We got comments from assessors, county 18 clerks, and -- and practitioners, CATA. And we put 19 it all in a matrix and a discussion document. We had 20 an interested parties meeting in April in which we 21 went over that discussion document. 22 In that document were approximately 28 items 23 that all sides brought up. We went through -- and I 24 had said that the purpose of this meeting was to 25 figure out how to address each item in the document 26 that was identified, the actual issue, staff's 27 analysis of that issue, our recommendation. And we 28 went through each one. 61 1 And we're trying to put each one of those 2 issues into possibly three categories for -- for how 3 to address -- either through guidance, LTA, revision 4 of handbooks, special -- special -- best practices, 5 or some kind of guidelines. 6 The second one was through regulatory 7 changes, stuff that would need actually regal 8 changes. And the third was stuff that actually 9 needed statutory changes. We went through a 10 four-hour meeting in April that covered approximately 11 two-thirds of those issues. 12 MS. STOWERS: Up to Item No. 12. 13 MR. YOUNG: Yes. Maybe less than 14 two-thirds. About half. But -- but we went through 15 each one of those issues. 16 As to whether we got agreement to all of 17 them, the answer is no, we did not. It was a very 18 contentious meeting. We had a lot of animated 19 discussion. And we were scheduled for another 20 meeting prior to the submission of the -- of the 21 amended regulation package. 22 And we have since put that one on hold 23 waiting for the Board to receive the benefit of 24 Mr. Nanjo's analysis. 25 MS. STOWERS: That's helpful. Because I was 26 at that meeting. And I thought we left that meeting 27 with the understanding that they were going to have a 28 second meeting in August -- 62 1 MR. YEUNG: Yes. 2 MS. STOWERS: -- after the assessors 3 finished their constitutional function of who -- 4 MR. YEUNG: Yes. Yes. 5 MS. STOWERS: So that's why there was a 6 delay in not having a say in -- in April was not 7 scheduled until August. And that's the reason why. 8 I just kind of wanted to get that clear -- 9 MR. RUNNER: Okay. 10 MS. STOWERS: -- that, you know, staff was 11 trying. And it was a very intense meeting. 12 MR. RUNNER: Okay. We have a number of 13 folks that are -- still have some cards here to speak 14 on this issue. So I'm going to invite -- I think we 15 have two from LA County, Edward Yen and Jeffrey 16 Meyer. 17 MR. YEN: Good afternoon, Chairman Runner 18 and Honorable Members of the Board. 19 I think after this afternoon's discussions 20 with the assessors and President Chuck Leonhardt from 21 the California Assessors Association, as well as 22 assessor John Berg's comments, LA County would like 23 to just -- we'll comment later on. 24 MR. RUNNER: Okay. 25 MR. YEN: And I think we'll just refrain 26 from -- 27 MR. RUNNER: Okay. Thank you. 28 MR. YEN: -- any further discussion. 63 1 MR. RUNNER: And then we have two people -- 2 or I think two individuals here from the Association 3 of Clerks and Election Officials for some comments. 4 MR. McKIBBEN: Thank you, Mr. Chairman, 5 Members. John McKibben on behalf of the California 6 Association of Clerks and Election Officials. Our 7 members are made up of clerks of the Board of 8 Supervisors, who are the managers of the assessment 9 appeal procedure, the Assessment Appeals Board County 10 Board of Equalization. 11 We are the folks who are trying to maintain 12 an even playing field and an effective method of 13 resolving disputes in counties. 14 We would also just state that we're 15 pleasured to work with the Board and with the other 16 stakeholders on this process. 17 MR. RUNNER: Okay. 18 MR. McKIBBEN: We do hope, however, that all 19 stakeholders will have an opportunity that there's a 20 good detailed exchange on some of the issues that 21 have been part of that process so far. 22 MR. RUNNER: Okay. Thank you. 23 And then we have Marie LaSala. 24 MS. LASALA: Hello, and thank you for having 25 us today. 26 I will also defer my comments. I appreciate 27 the continuance. And perhaps we'll offer some 28 comments after we get the benefit of your legal 64 1 counsel's analysis. 2 MR. RUNNER: Okay. Thank you. 3 Member Harkey. 4 MS. HARKEY: I'd just like to make one 5 comment. I know that Fiona has a nice office right 6 here in Sacramento. If she was amenable to holding 7 any conversations, probably in her conference room, 8 I'm just wondering if anybody is interested in that 9 offer. 10 She's gone now. But if so, I would suggest 11 that maybe the assessors and maybe Mr. Aprea make 12 that arrangement, or the staff make that arrangement 13 actually. And that might be a good meeting point. 14 MR. RUNNER: Okay. 15 MR. APREA: Ms. Harkey, there wasn't an 16 opportunity to -- to respond. But in her absence, 17 we're -- we would be delighted to do that, and -- 18 MS. HARKEY: Yeah, I -- 19 MR. APREA: -- and welcome all the other 20 stakeholders to do the same. 21 MR. RUNNER: Okay. 22 Comment real quick. 23 MR. LEONHARDT: The assessors would also 24 welcome that opportunity. And I think we were in 25 touch with her staff earlier today and discussed that 26 possibility. 27 MR. RUNNER: Okay. 28 MS. HARKEY: Okay. I just wanted to make 65 1 sure we were there. I didn't want to leave anything 2 dangling. We're on a short time fuse. 3 Thank you very much, Mr. Nanjo. 4 And thank you to -- 5 MR. RUNNER: Okay. 6 MS. HARKEY: -- the assessors. 7 MR. RUNNER: I think that -- I think we all 8 kind of know where we're going with this. We're 9 going to be back next -- 10 MR. HORTON: Question, Mr. Chair. 11 MR. RUNNER: Member Horton. 12 MR. HORTON: Thank you, Mr. Chair. 13 Mr. Nanjo, your timing on the legal -- 14 everyone has expressed a desire to -- to read your 15 legal analysis, take a look at it and provide their 16 input. If you -- will that be available prior to the 17 meeting on that -- on September? 18 MS. HARKEY: Yes. 19 MR. NANJO: I've committed to making -- 20 having it done by the meeting. I don't know how much 21 in advance of that meeting I can get it done. It 22 will probably go to the Board Members first, and then 23 it would be posted -- maybe posted as part of the 24 PAN. Depends on how we characterize it. Initially, 25 it's going to be -- it may be attorney-client 26 privilege to the Board Members. So -- 27 MS. STOWERS: I want say this, that 28 Controller Yee is going to really need to have that 66 1 memo in advance. And I'm going to need more than 10 2 days. 3 MR. RUNNER: Well, I think -- yeah, I 4 think -- I think the minimum we would want to be able 5 to see and that is it posted with the PAN. 6 MR. NANJO: Yeah. 7 MR. RUNNER: And that way at that point 8 everybody has -- has -- 9 MR. APREA: Thank you, Mr. Runner. 10 MR. RUNNER: -- has their time. 11 MR. APREA: We, too, would like to have that 12 opportunity. 13 MS. STOWERS: Because then we'd have to 14 waive attorney-client privilege, or -- 15 MR. RUNNER: Well, I think -- I think, 16 again, once the analysis is done, I mean, I think -- 17 we can see it first under attorney-client 18 privilege. 19 MR. NANJO: And then it's up to the Chair 20 and the Board whether they want to waive that and 21 make it available to the public. 22 MR. RUNNER: Well, then I think any -- I 23 think the analysis would be very important for both 24 parties to see. So I'm not sure why we would try to 25 not provide that. 26 MS. STOWERS: Yeah. 27 MR. LEONHARDT: The Assessors Association 28 feels it's critical for us to have a meaningful 67 1 meeting on the 25th to have that in advance. 2 MR. RUNNER: I would -- we would agree. 3 MS. STOWERS: We would too. 4 MS. HARKEY: I -- I don't -- I don't know 5 why it has to be attorney-client privilege. It seems 6 to me it's public information. 7 MR. RUNNER: Okay. 8 MR. NANJO: I'm not the holder of the 9 verbiage, I just didn't want to take that away from 10 you. 11 MS. HARKEY: Oh, okay. No, I -- I 12 understand. But we're looking -- we're looking for 13 your advice. And that can be disputed if all the 14 parties have -- have it in advance. 15 MR. NANJO: If this Board is comfortable 16 giving me direction, then I will -- I can give it to 17 the Board first. But I can also distribute it at 18 that time as well. 19 MR. RUNNER: I would -- I think -- 20 MR. NANJO: Make it available. 21 MR. RUNNER: I don't know why we would -- 22 that would be fine for me. I think for all of us. 23 MS. STOWERS: And for us. 24 MR. NANJO: Okay. I -- I will move on that. 25 And just, again, I don't want to get killed 26 by my staff. But I'm pushing them to have it done -- 27 MR. RUNNER: Yeah. 28 MR. NANJO: -- as early in September as 68 1 possible. 2 MR. RUNNER: Okay. 3 MR. NANJO: So we will try to give everyone 4 as much time as possible. 5 MS. HARKEY: Thank you. 6 MR. RUNNER: Okay. 7 And from the assessors. 8 MR. LEONHARDT: And as I mentioned before, 9 the Assessors Association would like to have it well 10 in advance so we can study it. But having said that, 11 we don't want to have Mr. Nanjo pressed in such a 12 manner that he doesn't have the opportunity to fully 13 vet the issues. 14 MR. RUNNER: Okay. 15 MR. NANJO: I appreciate that. Thank you. 16 MR. RUNNER: Okay. 17 MR. HORTON: Mr. Runner -- 18 MR. RUNNER: Yes. 19 MR. HORTON: -- if I may. 20 I think it's important that all the other 21 parties submit their views, their perspectives well 22 in advance as well. 23 The issues are on the table. Let's take a 24 look at your perspectives so that we have this prior 25 to coming into a hearing. And hopefully everyone 26 would have had an opportunity to kind of flush them 27 out. 28 And I know I'm being redundant here, but I 69 1 think it's important to also consider -- and this -- 2 the assessors may be the best -- and the county 3 clerks may be the best to share this information, the 4 practicality of the recommendation for one county to 5 another may be the sticking point for some of the 6 smaller counties being able to come into 7 concurrence. 8 MR. RUNNER: Or the larger counties. 9 MR. HORTON: Or the larger counties. It 10 could go one way or the other. Certainly could have 11 an impact -- 12 MR. RUNNER: Yeah. 13 MR. HORTON: -- on the taxpayers. 14 MS. STOWERS: I think that most of the 15 assessors have written letters expressing their 16 opinion and provided some recommendation on some of 17 the rules. And I believe Chief Counsel was reviewing 18 those letters and incorporating that into your legal 19 analysis as well. 20 MR. HORTON: Again, let me reiterate. I 21 mean, I've -- I've engaged with county assessors for 22 almost 30-some years. So let me encourage the county 23 assessor to modify their rules, whatever they need to 24 do to at least come to the table and -- and express 25 their commonalities where they agree and where they 26 disagree, and the reason for those disagreements. 27 Whether it's staffing issues, whether it's systemic 28 issues, institutional issues, we should be made aware 70 1 of those. Because we don't want to overly burden 2 some -- one area over another. We want equity across 3 the Board. 4 And I believe -- I've looked at all of them. 5 I've studied all of them. I believe there's a way to 6 get there. And I look forward to an opportunity to 7 express that. 8 MR. RUNNER: Member Harkey. 9 MS. HARKEY: I -- I just kind of -- I'm 10 viewing Mr. Nanjo's report as almost like a staff 11 report. So it goes out with the agenda, everybody 12 gets to look at it. The interested -- the parties 13 involved get to submit prior to the hearing, you 14 know, to Mr. Nanjo or to the -- to the clerk to just 15 submit to all of us if they have comments so that 16 everybody is fully briefed prior to the hearing of 17 what's going on. And then we can actually have a 18 substantive discussion here. 19 MR. HORTON: Mr. Chair, if I may recommend 20 one other thing. 21 MR. RUNNER: Yeah. 22 MR. HORTON: I mean, I also believe that 23 there should be synergy on the part of BOE. And 24 that -- and I think I may be repeating what 25 Mr. Runner said -- I mean, Harkey has said -- all of 26 this information flows through your office. And you 27 analyze the information, and then you send it at 28 least to my office. I want my experts in this to 71 1 provide their expert input. I'm certainly prepared 2 to make a policy decision. I'm certainly prepared to 3 make a legal decision and so forth. 4 But I think it's most appropriate to rely on 5 the experts to analyze it so there's some synergy. 6 So we don't have different people with different 7 levels of information, different understanding of 8 what the concurrence are, whether there's 28 issues 9 or 9 issues, or whether they're the jurisdictional 10 issues there or not. If we provide that synergy to 11 Mr. Nanjo's office, I think we can all get there. 12 MR. RUNNER: Okay. I think that brings 13 us -- 14 MS. HARKEY: It does. I just want to be 15 sure he's getting us all one report. It's not going 16 to any Member before it's -- 17 MR. RUNNER: Right. 18 MS. HARKEY: -- getting out on the agenda. 19 It needs to go to the agenda. We can all look at, 20 and we can all add our synergy at that point. 21 MR. RUNNER: Yeah. 22 MS. HARKEY: And -- and hopefully have -- 23 have something to talk about when we get here. 24 MR. RUNNER: Okay. 25 MR. NANJO: And to respond to Member 26 Stowers, I am -- and I've already met with CATA, as 27 they've mentioned, and LA county assessors. I'm 28 willing -- my office is willing to meet with whomever 72 1 wants to provide input. We accept any documents. 2 Feel free to send it to my attention. I will make 3 sure to include it in the analysis. 4 MR. RUNNER: Okay. Okay. 5 MR. NANJO: Thank you. 6 MR. RUNNER: Thank you very much. We know 7 where we're going. 8 MR. APREA: Thank you, Mr. Chair. 9 Thank you, Board Members. 10 MR. RUNNER: And we're going to go ahead and 11 let everybody take about a -- how about a five- to- 12 ten minute break here to stretch and give them the 13 rest of the agenda. 14 MR. NANJO: Member Runner. Chairman Runner. 15 MR. HORTON: Mr. Runner. 16 MR. NANJO: If I -- if I could make a 17 request. 18 MR. RUNNER: Okay. 19 MR. NANJO: I have an attorney up here from 20 LA, and she needs to catch a flight. So if we can do 21 the L2 Item when we come back from break, that would 22 be great. 23 MR. RUNNER: First? Okay. 24 MR. NANJO: Yeah. Thank you. 25 MR. RUNNER: Okay. We'll start with L2 when 26 we come back. 27 MR. LEONHARDT: Thank you, Board Members, 28 for your time. 73 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, Jillian Sumner, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on August 21, 2018 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 73 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: December 14, 2018 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 74