1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 MARCH 27, 2019 8 9 10 11 ITEM I 12 OTHER CHIEF COUNSEL MATTERS; 13 ITEM I1 14 REGULATORY PROCESS AND STATUS OF CURRENT 15 BOE REGULATIONS 16 17 18 19 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 of Honorable Malia S. Cohen Equalization: Chair 4 Honorable Antonio Vazquez 5 Vice Chair 6 Honorable Ted Gaines First District 7 Honorable Mike Schaefer 8 Fourth District 9 Yvette Stowers Appearing for Betty T. 10 Yee, State Controller (per Government Code 11 Section 7.9) 12 For the Board of Henry Nanjo 13 Equalization Staff: Chief Counsel Board Proceedings 14 Richard Moon 15 Tax Counsel IV Legal Department 16 17 Toya Davis Clerk 18 Board Proceedings 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MARCH 27, 2019 4 ---oOo--- 5 MS. DAVIS: Madam Chair, our next item is I, 6 Other Chief Counsel Matters. Mr. Nanjo will present 7 on the regulatory process and the status of current 8 BOE regulations, the roles and responsibilities of 9 the Board staff and county assessors. 10 Mr. Nanjo. 11 MS. COHEN: Good morning, Mr. Nanjo. 12 MR. NANJO: Good morning, Madam Chair. 13 Thank you very much, Ms. Davis. 14 So good morning, Chair Cohen, Board Members, 15 and Deputy Controller Stowers. 16 As you know, I'm Henry Nanjo, Chief Counsel 17 of BOE. And I would like to take this opportunity to 18 present an overview of BOE's regulations and status 19 of updating efforts on the regulations, as well as a 20 quick rundown of the process on making regulatory 21 changes. 22 Before I forget, I have next to me 23 Mr. Richard Moon. Richard Moon is our Board of 24 Equalization Tax Counsel IV. He's our senior most 25 tax counsel and most experienced in property tax 26 matters. 27 So without further ado, the BOE regulations 28 are found in certain divisions of Title 18 of the 3 1 California Code of Regulations. Notably, Division 1 2 contains Property Tax regulations, collocally 3 referred to as the Property Tax Rules. And 4 Division 2.1 contains the Rules for Tax Appeals. 5 These regulations are laws generated through 6 the Office of Administrative Law process by the BOE 7 to implement statutes that are passed by the 8 Legislature. 9 Publications related to the regulations in 10 an effort to increase visibility to our regulations 11 and to provide usable tools for the public, the BOE 12 has historically engaged in two publications related 13 to these regulations; The Property Tax Law Guide and 14 Publication 310, the Rules for Tax Appeals. 15 The Property Tax Law Guide started out as a 16 hard copy, three-binder publication that included 17 relevant law, constitutional provisions, statutes, 18 regulations, and guidance from BOE legal staff 19 referred to as the Property Tax Annotations. 20 The Property Tax Law Guide in Volume 1 21 contains those portions of the Revenue and Tax Codes, 22 setting forth the laws relating to the assessment and 23 equalization process, along with appropriate 24 provisions of the California Constitution, property 25 tax rules -- and property tax rules adopted by the 26 BOE. 27 Volume 1 also contains Private Railroad Car 28 Tax law, the Morgan Property Taxpayers' Bill of 4 1 Rights, some selections of the Rules of Tax Appeals, 2 and a table of cases for annotated court cases 3 appearing throughout the law. 4 Volume 2 contains parts of the Revenue and 5 Tax Code that primarily involve tax collecting and 6 county auditor functions. 7 Volume 2 also contains provisions from the 8 Government Code and other codes, general law 9 provisions, supplemental acts, and the Revenue and 10 Taxation Code, which are relevant to the BOE. 11 Finally, Volume 3 contains property tax 12 annotations, which are the summaries of rulings of 13 the legal counsel for BOE. 14 So the challenge here is that these 15 documents exist in a physical form as well as on our 16 Web site. Updates to the physical volumes of the 17 Property Tax Law Guide ended in 2016. The BOE's Web 18 site copy of the Property Tax Law Guide continue to 19 be updated until 2017. But as you can see from the 20 dates, they are somewhat dated. 21 The second publication is Publication 310, 22 the Rules for Tax Appeals. It's a soft-bound volume, 23 approximately 130 pages in length, which comprises 24 the BOE regulations on appeal procedures applicable 25 to the Board for various tax and fee programs 26 administered by the Board. 27 The Rules for Tax Appeals was to address 28 public concerns regarding the administrative and 5 1 appellate review processes, and improve the 2 relationship between tax and fee payers and the BOE. 3 This was essentially supposed to be the 4 guide, as you know, for hearings and for the Board 5 Members. Taxpayers -- okay, thank you -- taxpayers 6 can come to -- in front of the Board, and the Rules 7 for Tax Appeals was supposed to be a guide that they 8 can use on how the process works. Kind of a "how to" 9 guide. 10 The art -- again, the Rules for Tax Appeals, 11 in its physical form, was last updated in April of 12 2016. To make matters more confusing, there are 13 provisions of the Rules for Tax Appeals found on 14 BOE's Web site in a couple of different forms, and in 15 a couple of different locations. And they're 16 different excerpts. 17 The challenge and the reason I bring this to 18 the Board's attention is for the Property Tax Law 19 Guide, the loose leaf used to be kind of the 20 bible/training manual for a lot of your county 21 assessors and county auditors on how to train their 22 staff, how to work on property tax matters, and 23 things of that nature. 24 I've had many instances where I talked to 25 county assessors and their staff at various county 26 assessors' association events where they've kind of 27 expressed some concern about the fact that some of 28 their older staff still like using the physical 6 1 volumes. And those aren't being updated. 2 Likewise, even those, if I can be -- kind of 3 cast a wide net, younger folks of their offices who 4 use the more online publications find that there's 5 some dated -- outdatedness in those documents as 6 well. 7 So this is a big priority of the Legal 8 Department to try to get caught up. Particularly for 9 the Rules for Tax Appeals. These have not been 10 updated since we had the split. 11 So these -- there are some rules that are 12 references to programs that we no longer have at the 13 BOE. I know that OTA and CDTFA are in the process of 14 updating their portions of the regs. So that's 15 getting cleared up. But ours are out of sync. So 16 that's a high priority for your Legal Department to 17 try to get those fixed up. 18 In terms of regulations, the Property Tax 19 Rules do not require substantive updates as a result 20 of AB 102. If a legislative change occurs that 21 requires a property tax regulation revision, we 22 handle that on a case-by-case basis going forward. 23 However, as the Rules for Tax Appeals covers 24 all the duties and programs handled by the Board 25 prior to AB 102, substantive updates are needed. 26 In addition, the BOE Legal staff is 27 currently working on changes to the RTA, or Rules for 28 Tax Appeals, and we'll bring them before the Board in 7 1 what is known as Rule 100 Changes. 2 Rule 100 Changes are essentially amendments 3 without substantive effect, and do not need to go 4 through the regular notice and public hearing 5 process. These are kind of more like minor changes 6 to the rules. 7 Once the Rule 100 Changes are made to the 8 RTA, a revised publication, the 310, can be issued at 9 that time. 10 To give the Board a little briefing on what 11 the Rule 100 -- excuse me -- the non-rule 100 12 regulation process is, just to give the Board an 13 indication, this is unfortunately somewhat of a 14 lengthy process. Because what has to happen is the 15 staff first identifies the regulatory needs and 16 drafts proposed regulations. 17 We, at that point, then, start our 18 interested parties process and meet with industry and 19 interested parties to identify and resolve issues and 20 language concerns. 21 Proposals for regulatory changes may also be 22 submitted by the public or county assessors. So we 23 have a lot of input coming in from different areas. 24 Staff prepares an issue paper identifying 25 the areas in which the staff and industry groups or 26 assessors may have a dispute. 27 Following the presentation of the issue 28 paper to the Board, the Board decides whether or not 8 1 to authorize the publication of the proposed 2 regulation or take some other action. They can 3 either change them, or keep them as suggested by 4 staff, or direct staff to work on particular areas. 5 After Board authorization to publish is 6 given at a Board Meeting, the regulation's 7 coordinator in Board Proceedings Division submits the 8 notice of proposed regulatory action to the 9 Department of Finance for concurrence. 10 Then the Office of Administrative Law -- 11 after we receive the concurrence from Department of 12 Finance, it then goes to the Office of Administrative 13 Law, or OAL, for publication in the California 14 Regulatory Notice Register. 15 The regulation's coordinator then mails 16 notice to interested parties. The proposed 17 regulations must be noted -- noticed in the 18 California Regulatory Notice Register for at least 45 19 days prior to a public hearing, and the close of the 20 public comment period. 21 At the public hearing, the assigned staff 22 describes the proposed regulatory action and 23 recommends a specific action on the proposal. This 24 is a public hearing where, again, the public can come 25 and make comments. 26 The Chair may call interested parties to 27 testify, and the Board may also ask staff to respond 28 to the testimony and answer any questions raised by 9 1 the interested parties. 2 Once those -- the public hearing is 3 completed, if the Board adopts the regulation as 4 published, or only with non-substantive changes, the 5 regulation is then forwarded to OAL and DOF, or 6 Finance, for approval and filing with the Secretary 7 of State. 8 If the Board adopts regulations with changes 9 that are sufficiently relayed to the original 10 version, the full text with the changes clearly 11 indicated is made available to the public for at 12 least 15 days before the agency adopts the 13 regulation. 14 If they're not sufficiently related or there 15 are substantial changes, then we have to start the 16 process all over again. So that's what makes this a 17 rather lengthy process. 18 A final statement of reasons responding to 19 every public comment must be submitted either orally 20 or in writing regarding the proposed regulation and 21 must be included with the final documentation sent to 22 OAL. 23 Then, the effective date, pursuant to 24 Government Code 11343.4 is determined by the date the 25 regulation is filed with the Secretary of State. Its 26 January 1st if the regulation or order of appeal is 27 filed on September 1st to November 30th inclusive; 28 April 1st if it's December 1st to February 29th. In 10 1 other words, it's after the quarter that that has 2 been issued. 3 And exceptions to this rule exist for 4 regulations that are adopted pursuant to a statute 5 requiring a specific date in which the regulations 6 are effective, or a request for earlier or later 7 effective date if good cause is shown. But then you 8 have the process where you have to make a showing of 9 good cause to OAL. 10 The status of rules that are currently in 11 process, staff determines necessary or regulatory 12 changes based on changes to the statutory law and 13 regulatory needs. 14 In 2019 our rulemaking projects include 15 Section 100 Changes; Rule 464, Veterans' Exemptions; 16 to implement the changes to the Revenue and Tax Code 17 205.1, which was passed by the Legislature; Rule 140, 18 which is the welfare exemption requirement for low 19 income housing properties to implement changes to RTC 20 214; and then, again, Rules for the Tax Appeals to 21 confirm with the AB 102 changes or projects that are 22 currently in progress; Rule 300 and assessment 23 appeals amendments, to clarify portions of the local 24 assessment appeals process that was adopted by the 25 Board on December 12th, 2018 and submitted to DOF on 26 January 25th 2018. 27 We also have changes in progress on Rules 28 370 and 370.5 on county sampling; amendments to 11 1 implement AB 681 that was sent to DOF for concurrence 2 in the summer of 2018; Rules 462.180, legal entities, 3 amendments to provide guidance on rules to determine 4 change and control and counting of original co-owner 5 shares. We're currently drafting these regulations. 6 And then Rule 462.500, eminent domain, these 7 are amendments to implement Senate Bill 803. Staff 8 is currently reviewing drafted proposed regulations. 9 When these regulations become final, we'll 10 be bringing them to the Board. But suffice it to 11 say, sorry for the kind of dense Chief Counsel 12 report. But every time there is statutory changes 13 that occur via the Legislature on matters that affect 14 property tax, usually requires a cycle of us having 15 to modify or at least look at our regulations and 16 make sure they're in sync. 17 I have Richard Moon here available to answer 18 any questions. Unfortunately Richard is tasked with 19 the bird-dogging of all these regulatory changes, so 20 he can let you know what's in the pipeline and what's 21 coming up. 22 MS. COHEN: Thank you. We appreciate that. 23 And no need to apologize. That's exactly 24 what we're here for, to hear even the most complex 25 and complicated items that you bring for us. 26 MR. NANJO: Thank you. 27 MS. COHEN: It's music to our ears. 28 Mr. Moon, are there any comments that you'd 12 1 like to share with us? 2 MR. MOON: No, nothing specific. If you 3 have any questions on any particular rules or the 4 process, I'd be happy to answer those. 5 MS. COHEN: All right. Thank you. I 6 appreciate that. 7 Ms. Stowers, do you have anything? 8 MS. STOWERS: I just have a couple. 9 MS. COHEN: Please. Absolutely. 10 MS. STOWERS: Mr. Nanjo, you talked about 11 the -- I think it was the Property Tax Guide. 12 MR. NANJO: Yes. 13 MS. STOWERS: And we -- sounds like we've 14 gone green, and we're not printing these documents 15 anymore. But the assessors are expressing some 16 concerns. Some people like to have that paper. 17 Are you looking to print, or are you going 18 to continue with the online? 19 MR. NANJO: One of the challenges that came 20 up last year is it actually costs the Board of 21 Equalization quite a bit of money to print the -- 22 even, you know -- even though they're loose sleeves, 23 to print the updates and what have you. And, 24 candidly, there aren't that many people who are 25 asking for the print copy. 26 So for budget reasons, I think first and 27 foremost we need a place in our Web site where there 28 is a current set of rules. That's the first 13 1 priority. 2 As you know, and we'll be discussing later 3 in the agenda, Legal staffing is kind of short. So 4 we're trying to put our resources where they'll have 5 the most effect, if you will. 6 The other issue that we're working on, I 7 have another staff member working on is cleaning up 8 our Web site. Because one of the things, as you 9 know, I came to the Board in September of 2017. When 10 I looked at the Board's Web site, we have rules -- 11 the Rules for Tax Appeals portions of them are all 12 over the place. We really need to get that kind 13 of -- if nothing else, you need to go back to one 14 place, we need to make sure we're referencing one set 15 of rules. 16 The challenge with it being in different 17 locations is we may remember to update it here, but, 18 you know, you always run the risk that it might not 19 be updated in all your locations. So we need to fix 20 that up as well. 21 MS. STOWERS: Thank you. 22 Go back to the Rule of Tax Appeals, I can 23 see the need for updates, or at least deletions. So 24 are you considering that to be a significant workload 25 for you? Especially when you consider the Office of 26 Tax Appeal has already had their emergency 27 regulations and their permanent regulations 28 approved. 14 1 MR. MOON: For us there is still a 2 significant amount of work involved, because we have 3 to go through all of our regulations and change some 4 of the wording, change some of the terms. 5 For example, there are a lot of references 6 to the Appeals Division, which no longer exists. So 7 now we have to change that to appeals attorney. 8 There's a number of changes like that. We 9 have to go through all of the reference and the 10 authority notes to make sure all the statutory 11 references and authorities are correct. And that 12 involves deleting a lot of them. 13 But many of them are -- for the property tax 14 attorneys, portions of a code that we've never been 15 in before. So, you know, we have to educate 16 ourselves on, for example, a little bit on 17 underground storage tank fees, for example. Just so 18 we know what to move. 19 MS. STOWERS: Okay. Yes. 20 MR. MOON: So it does involve a lot of work. 21 MS. STOWERS: Okay. I appreciate that. 22 And then, Mr. Nanjo, you talked about some 23 of the rules. My favorite is the assessment appeals 24 process rules went to DOF in December, and then 25 something else that went to DOF, I believe you said 26 in the summertime. 27 MR. NANJO: Yes. 28 MS. STOWERS: Are these typical timeframes 15 1 that we're still waiting for DOF? 2 MR. NANJO: Unfortunately, we don't have any 3 control over Department of Finance. It's another 4 department. So we do reach out to them, or as I call 5 it, ping them on a regular basis. It's -- it's a 6 little bit of a challenge because they have their own 7 regulations' coordinator. And what happens a lot of 8 times is they have questions, or, more likely, they 9 have modifications that they want us to make to our, 10 for lack of a better term, back-up documentation. 11 A lot of times, even though we're confident 12 that we've provided the information that the public 13 and OAL needs, it's better to just try to give 14 Finance what they want to get their approval. So 15 it's just kind of an ongoing process. 16 MS. STOWERS: So have they asked for any 17 additional documentation as it relates to the tax 18 appeals rules that we submitted in December? 19 MR. MOON: Yes, they have. And so we've 20 complied with what they've requested, and they're now 21 looking at them again with that additional 22 information. 23 MS. STOWERS: Perfect. 24 So going back to my earlier question then, 25 so you can't tell us whether it's normally six months 26 or nine months or twelve months in a timeframe before 27 the Department of Finance is moving it forward? 28 MR. NANJO: Unfortunately, they don't have 16 1 any set timeframes. And my looking back at the 2 experience BOE has working with Finance is that 3 timeframe varies greatly. Sometimes it's a matter of 4 a few weeks. Typically not less than that. And a 5 lot of times it's several months. 6 I understand from talking to some of the DOF 7 staff that a lot of it has to do with what else is 8 going on in their shop. If they have, you know 9 -- for example, if they're working on the state 10 budget or things of that nature, that tends to, you 11 know, be a higher priority. 12 MS. STOWERS: Okay. 13 MR. MOON: Yeah. I will add, there's no 14 statutory deadline by which DOF has to give their 15 concurrence or not give their concurrence. 16 Typically, in the past, as Mr. Nanjo has 17 stated, the time varied. I've seen things go through 18 as quickly as maybe a couple months, three months, 19 and then the longest, you know, perhaps a year or 20 more. 21 MS. STOWERS: All right. Thank you. 22 Thank you. I appreciate that. 23 MR. NANJO: Sure. 24 MS. COHEN: All right. Thank you. 25 Anyone -- Mr. Vazquez. 26 MR. VAZQUEZ: Actually, I was happy to hear 27 that you're trying to save some trees. You know, I 28 think the more we can do to put things online, the 17 1 better. 2 And actually, if there's a savings there, I 3 agree with you. We need to do a better job on our 4 Web site. Just in terms of the Member's Web site and 5 the BOE's as a whole, I think it needs a whole lot of 6 improvement. 7 And as I'm hearing from folks in the public, 8 it's very difficult to navigate our current Web site 9 now. 10 MR. NANJO: Yes. 11 MR. VAZQUEZ: But my question to you now is 12 given your presentation here, what is your view on 13 the process when a Board Member receives a petition 14 for a rule change? 15 MR. NANJO: If a Board Member receives a 16 petition for rule change, that should be forwarded to 17 Board Proceedings. And then we will respond to that 18 accordingly. There is a process at the BOE for 19 petitions for rule changes. 20 MR. VAZQUEZ: And is that like something 21 that takes a week, two weeks, a month? 22 MR. MOON: Well, the Administrative 23 Procedure Act, which governs how you do rulemaking, 24 requires that if there's a petition, that the Board 25 respond, I believe it's within 30 days. And so it's 26 important that the Legal Department get that petition 27 as quickly as possible. 28 Oftentimes we won't respond substantively 18 1 with it in that 30 days, but at a minimum we'll reach 2 out to the person who submitted the petition, and 3 work with them to get a -- get a good time line. 4 MR. VAZQUEZ: So the time starts ticking 5 when you receive it or when we receive it? 6 MR. MOON: No, when the Board receives it. 7 MR. VAZQUEZ: When the Board receives it. 8 Okay. 9 MR. MOON: Yeah. 10 MR. NANJO: Yeah. 11 MS. STOWERS: And, could I add on? 12 MR. VAZQUEZ: Sure. Go ahead. 13 MS. COHEN: Absolutely. 14 MS. STOWERS: It might be helpful if you 15 guys kind of explain. Because we've had some of 16 these in the past. And they go to Legal, you guys 17 acknowledge receipt, you work with the party. 18 Especially if it's mid of a Board Meeting, you know, 19 we're not going to meet in another 30 days. 20 MR. VAZQUEZ: Right. 21 MS. STOWERS: But can you explain to the 22 parties, to our Members how it would come back on a 23 Chief Counsel matter? 24 MR. NANJO: Sure. 25 Do you want to -- 26 MR. MOON: Yeah. 27 So what would happen is we would get the 28 petition. We'd take a look at it substantively. And 19 1 assuming it's a matter that requires some research 2 and back and forth with the petitioner, we would 3 reach out to them. We would talk to them. We would 4 perhaps suggest tweaks to the regulation, or we would 5 tell them why we disagree. 6 We would -- if the Board is not going to 7 meet within that 30 days, we would ask them to waive 8 that 30-day time limit, so that we can bring it 9 before the Board. 10 And the way that we would bring it before 11 the Board is through a Chief Counsel memorandum where 12 we describe the petition in detail. We would give 13 the pros and cons, and then we would give the staff's 14 recommendation as to whether we think the Board 15 should go ahead and approve publication or not. 16 MR. VAZQUEZ: Thank you. 17 MR. NANJO: And one of the things, though, 18 if I can add -- 19 MR. VAZQUEZ: Sure. 20 MR. NANJO: Member Vazquez, we try to -- we, 21 in the Legal Department, try to do is work with the 22 person who is requesting the change. A lot of times 23 we're able to point them to other rules or other 24 procedures that will meet their needs without having 25 to do a formal rule change. 26 Because one of the things we're very up 27 front about is even if we were supportive and the 28 Board approved it, it's still a long process, as you 20 1 can see. 2 MR. VAZQUEZ: And the reason I bring it up 3 is that just in my conversations recently with some 4 of the members both on the Assembly and the Senate, 5 is they're looking at some of their bills, that I 6 know we're flagging, that have some impact on the 7 BOE. Some of them had suggested some possible 8 changes, and I kind of welcomed it. 9 So I'm hoping or expecting to get some of 10 those actually in writing. And I will share those 11 with you. 12 MR. NANJO: Absolutely. We appreciate it. 13 And we'll definitely -- it's a priority, as 14 Mr. Moon suggested, under our rules and statutes, to 15 jump on those and work on them right away. So that's 16 one of the things that takes us off-line on writing 17 opinions and what have you. 18 MR. VAZQUEZ: Thank you. 19 MS. COHEN: Well, thank you gentlemen. 20 You've actually done a very good job outlining the 21 complexity of the property tax regulatory process. 22 And I think you've also done an excellent 23 job highlighting the need to make sure that the 24 regulatory process is done right, and most 25 importantly, transparent. Which would include taking 26 into consideration all the issues that are important 27 to taxpayers, tax practitioners, and some of our 28 other stakeholders. 21 1 I appreciate the hard work that goes into 2 each and every document that you prepare. And that 3 we recognize that there are challenges and time 4 constraints that govern your daily routine. 5 I'm curious to know, because I think, Mr. 6 Nanjo, you highlighted a couple of the challenges 7 that you're facing within your division. And I 8 appreciate you for taking the leadership role and 9 bringing it to our attention. I want to help you. 10 And I was wondering if you are able to highlight 11 how -- how the agency found itself in this 12 position. 13 MR. NANJO: Okay. I'm actually going to get 14 into that in a little more detail -- 15 MS. COHEN: Okay. 16 MR. NANJO: -- in the Chief Counsel Report. 17 If I can put a placeholder for that. 18 MS. COHEN: Not a problem. Absolutely. 19 Since we're putting a placeholder, I'm 20 specifically going to be listening to an answer to 21 the question as to how the Property Tax Law Guide and 22 other regulations became out of date. So that's one 23 thing I want to hear in your presentation. 24 And, again, want to acknowledge I understand 25 there are challenges. I want to know what additional 26 resources you need. Is that also in the 27 presentation? 28 MR. NANJO: Yes. 22 1 MS. COHEN: Okay. All right. 2 MR. NANJO: Basically we need staff. We 3 need bodies. 4 MS. COHEN: Okay. All right. 5 Well, then I'll just close out. And just 6 want to applaud your efforts for bringing the issue 7 to the front and center. 8 And, Mr. Moon, thank you for traveling to be 9 here with us today. 10 I think that this work that we're discussing 11 today is overdue. And I'm honored to be here to help 12 you to implement and make those types of changes. 13 And I encourage and continue to keep this body in 14 form, so that we can work on this together 15 collectively. 16 Mr. Vazquez. 17 MR. VAZQUEZ: Yeah. Just a quick follow 18 up. 19 MR. NANJO: Sure. 20 MR. VAZQUEZ: So when a Member, one of us, 21 let's say, receives it and passes it on to you, do 22 you also -- is part of the process when you receive 23 it and share it with the rest of the Members as well? 24 MR. NANJO: It will be shared with the 25 Members at the Board Meeting. What we will do, 26 though, is whichever Member sends it to us, because 27 somebody's reached out to you, we'll keep your office 28 in the loop as far as where we are on it. 23 1 Because of our 30-day response time, if it's 2 a formal petition for tax rule change, we do have to 3 work kind of quickly to get it in front of the Board. 4 So we -- we do jump on that right away. 5 But your -- whichever Member's office -- I 6 want to assure the Members -- brings that to us, we 7 will keep you in line on every step that's going on. 8 The larger Board, we'll let you know about 9 that at the Board Meeting which should happen, you 10 know, within 30 days or shortly thereafter. 11 MS. COHEN: All right. Thank you. 12 Senator -- Senator Gaines. 13 MR. GAINES: Yeah. I was just -- thank you 14 for your presentation. But I'm wondering if you 15 could dig in a little bit on the staffing issue. How 16 many more attorneys do we need? 17 MS. COHEN: I think he's gonna make that -- 18 he's gonna -- 19 MR. NANJO: Yeah. There's a Chief Counsel 20 report coming under the K2 Item, if I'm not mistaken. 21 MR. GAINES: Okay. 22 MS. COHEN: Yes. 23 MR. NANJO: And I'll get into the staffing 24 issue. 25 I did want to address Member -- excuse me -- 26 Chair Cohen's question about when the Property Tax 27 Law Guide got out of date. 28 MS. COHEN: Mm-hm. 24 1 MR. NANJO: The challenge is -- and I don't 2 want to just say this is a Legal issue. Because we 3 work very closely with program staff. And program 4 staff has a lot of stake in helping us develop -- 5 making sure we got the regulations right, that the 6 materials are presented right. I didn't want to 7 spill over into Mr. Yeung's presentation. But the 8 Assessors' Handbook, these are all things that Legal 9 works hand in hand with program staff with. 10 And part of the challenge has been when 11 AB 102 struck, as you know, that was very disruptive 12 to obviously all of BOE 1.0, but particularly the 13 Property Tax Division. And that really -- if you 14 look at the timing, some of the things stopped being 15 published in 2016. The last updates were in 2017. 16 You know, you can see that there was a direct 17 corollary with those events. 18 So I think the short answer to you, Chair 19 Cohen, is that we're still trying to recover from the 20 change that occurred due to AB 102. It kind of threw 21 all of us out of sync. You know, there's staffing 22 shortages on that side as well from the standpoint of 23 we're still trying to replenish staff and knowledge 24 base. 25 So these are all kind of, unfortunately, a 26 cascading set of events that led to where we are 27 today. 28 MS. COHEN: Okay. 25 1 Senator -- yes. 2 MR. GAINES: Just a follow up on the inquiry 3 petition issue as it relates to updating the 4 handbook. 5 So is there a direct relationship there? 6 Would we have fewer inquiries and petitions if our 7 handbook was updated? 8 MR. MOON: Um -- 9 MR. NANJO: It's kind of hard to say. 10 MR. MOON: Yeah. It's hard to say. I 11 suppose that's possible. But I would say that it's 12 unlikely that there would be additional petitions 13 because the handbooks are not updated. 14 MR. GAINES: Okay. All right. 15 MR. NANJO: Where the handbook really helps 16 out is there's a lot of requests for legal opinions 17 that the Legal Department gets. And I think, to some 18 extent -- I don't know if Richard agrees with me or 19 not -- but to some extent, I think that would be 20 alleviated if we didn't have some gaps in our 21 Assessors' Handbook, and some of our other 22 documents. 23 MR. MOON: Yeah, that's definitely possible. 24 MR. GAINES: Sure. 25 MR. MOON: And as well, some of the -- 26 particularly, the legal opinions and annotations, 27 before they make it into the law guide, are actually 28 published on our Web site on a different part of the 26 1 Web site under something that's called Current Legal 2 Digests. 3 MR. GAINES: Mm-hm. 4 MR. MOON: And if people were aware of that, 5 that may also reduce the number of opinion requests 6 that we get. 7 MR. GAINES: Okay. So it may be an 8 opportunity for a better dissemination of that 9 information? 10 MR. NANJO: Absolutely. 11 And, you know, one of the things that makes 12 us, I think, unique, from my perspective as Chief 13 Counsel, is the Board deals a lot with the regular 14 people. It's not like superior court where most of 15 the people that come in front of them are attorneys 16 and have access to Westlaw, or you know, the legal 17 resources. 18 We're the ones who provide them with the 19 resources to our legal opinions or annotations and 20 what have you. And that's why, I think, it's vitally 21 important that we keep our Web site and our 22 regulations and these publications up to date. 23 MR. GAINES: Thank you, Mr. Nanjo and 24 Mr. Moon. 25 MS. COHEN: Mr. Nanjo, I'm just curious, 26 since we now have had two Members bring up the 27 staffing agenda, and since Mr. Moon is here, I was 28 just wondering, is there any reason that we should 27 1 delay your brief -- a brief conversation about -- 2 MR. NANJO: No, I can go into that if you 3 want to call the K2 Item. 4 MS. COHEN: I believe -- I believe that 5 that's appropriate if we've got Mr. Moon here for a 6 couple more minutes. 7 Mr. Moon, you're good on time? 8 MR. MOON: Absolutely. 9 MS. COHEN: All right. Thank you very much. 10 So, Ms. Davis, would you mind please calling 11 the K Item? 12 Thank you. 13 ---oOo--- 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28 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 March 27, 2019 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 28 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: July 19, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 29