BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 5901 Green Valley Circle, Room 207 Culver City, California REPORTER'S TRANSCRIPT FEBRUARY 26, 2009 FINAL ACTIONS Reported by: Beverly D. Toms No. CSR 1662 1 1 2 P R E S E N T 3 4 For the Board Betty Yee of Equalization: Chair 5 Judy Chu 6 Vice-Chair 7 Bill Leonard Member 8 Michelle Steel 9 Member 10 Marcy Jo Mandel Appearing for John 11 Chiang, State Controller (per Government Code 12 Section 7.9) 13 Diane Olson Chief, Board 14 Proceedings Division 15 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 2 1 ITEM C1 2 Culver City, California 3 February 26, 2009 4 ---oOO--- 5 MS. OLSON: Our next matters are final actions. 6 I know we have item I, but we're waiting for Mr. Chiang. 7 MS. YEE: Okay. All right, let's go back to 8 the cases -- 9 MS. OLSON: Final actions. 10 MS. YEE: -- taken under submission. Yes. 11 MS. OLSON: Okay. The final actions is C1, 12 Nassim Khoury. 13 MS. YEE: Okay. 14 DR. CHU: Move to adopt the staff 15 recommendation. 16 MS. YEE: Okay. Motion by Dr. Chu to adopt the 17 staff recommendation. Is there a second? 18 DR. CHU: Second. 19 MS. YEE: Second by Ms. Mandel. Without 20 objection -- 21 MR. LEONARD: Is that the -- 22 MS. YEE: Item C1. 23 MR. LEONARD: Madam Chair -- 24 MS. YEE: Yes, Mr. Leonard. 25 MR. LEONARD: I have a better understanding now 26 I think of what he attempted to do, and it strikes me as 27 more -- very gross negligence than fraud. He seemed 28 like he was trying to do what he thought the law was 3 1 even though he totally misunderstood the laws. 2 Is there any interest in the Board in changing 3 the penalty to negligence from fraud? 4 DR. CHU: Not for me. 5 MS. YEE: Yeah, neither for me. I mean, it was 6 clear that even though he stated his intent of what he 7 was trying to do, the figures didn't tie out to really 8 bear out what his intent was. 9 MS. STEEL: Is it an alternate motion? 10 MS. YEE: We do have a motion to adopt the 11 staff recommendation with a second. 12 Is there -- well, let's call the roll on that 13 motion. 14 MS. OLSON: Madam Chair. 15 MS. YEE: Aye. 16 MS. OLSON: Mr. Leonard. 17 MR. LEONARD: No. 18 MS. OLSON: Ms. Steel. 19 MS. STEEL: No. 20 MS. OLSON: Dr. Chu. 21 DR. CHU: Aye. 22 MS. OLSON: Ms. Mandel. 23 MS. MANDEL: Aye. 24 MS. OLSON: Motion carries. 25 MS. YEE: Okay. 26 Next matter. 27 ---oOo--- 28 4 1 ITEM C4. 2 MS. OLSON: Next item is C4, Carter James Read. 3 MS. YEE: Okay. 4 MR. LEVINE: Madam Chair, Members, we have a 5 revised recommendation in this. The Department has gone 6 back and taken a look at the quarter of the assessment 7 that's based on an estimate, and has recalculated its 8 estimate. I can explain how that was done if you're 9 interested, but the bottom line is the Department 10 recommends a reduction to the tax at $20,153 and related 11 penalties and interest reduction, as well. 12 MS. YEE: Okay. 13 MS. MANDEL: So move the revised staff 14 recommendation. 15 MS. YEE: Okay. Motion by Ms. Mandel to adopt 16 the revised staff recommendation. 17 Is there a second? 18 DR. CHU: Second. 19 MS. YEE: Seconded by Dr. Chu. 20 Without objection, that motion carries. 21 ---oOo--- 22 23 24 25 26 27 28 5 1 ITEM D1a and b. 2 MS. OLSON: Then our last item is D1a and b, 3 Smoke Rings, Inc. 4 MS. YEE: Okay. Item D1a and D1b, Smoke Rings, 5 Incorporated. Is there a motion? 6 DR. CHU: Move to adopt the staff 7 recommendation. 8 MS. YEE: Okay. Motion by Dr. Chu to adopt the 9 staff recommendation. Is there a second? 10 MS. MANDEL: Second. 11 MS. YEE: Second by Ms. Mandel. 12 Without objection, that motion carries. 13 Yeah, why don't we recess for ten minutes and I 14 believe -- we're expecting the Controller at 11:30. 15 DR. CHU: He's here. 16 MS. YEE: Oh, he's here. I'm sorry, okay. 17 ---oOo--- 18 19 20 21 22 23 24 25 26 27 28 6 1 REPORTER'SCERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, BEVERLY D. TOMS, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 February 26, 2009 I recorded verbatim, in shorthand, to 10 the best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding 6 pages 13 pages constitute a complete and accurate transcription 14 of the shorthand writing. 15 16 Dated: March 18, 2009. 17 18 19 20 ____________________________ 21 BEVERLY D. TOMS 22 Hearing Reporter 23 24 25 26 27 28 7