1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 DECEMBER 15, 2009 9 10 PROPERTY TAX COMMITTEE 11 12 13 14 15 16 17 18 19 Reported by: Juli Price Jackson 20 No. CSR 5214 21 22 23 24 25 26 27 28 1 1 2 P R E S E N T 3 4 For the Board Michelle Steel of Equalization: Chair 5 6 Betty T. Yee Member 7 Bill Leonard 8 Member 9 Jerome E. Horton Member 10 Marcy Jo Mandel 11 Appearing for John Chiang, State Controller 12 (per Government Code Section 7.9) 13 Diane G. Olson 14 Chief, Board Proceedings Division 15 16 17 ---oOo--- 18 19 20 21 22 23 24 25 26 27 28 2 1 INDEX OF SPEAKERS 2 NAME PAGE 3 Gerry Bonetto 5 4 Johan Klehs 7 5 6 7 ---o0o--- 8 9 10 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 DECEMBER 15, 2009 4 ---oOo--- 5 MS. RICHMOND: The next item on this morning's 6 agenda is the Property Tax Committee. Ms. Steel is the 7 Chair of that committee. 8 MS. STEEL: I'll call the Property Tax 9 Committee meeting to order. 10 Where is Dean? 11 MR. HARRIS: I'll be sitting in for Dean this 12 morning. 13 MS. STEEL: Okay, we have three items before us 14 today. 15 And the first item is the adoption of the 16 valuation factors, including the definition of "offset 17 lithographic printing presses." 18 And BOE? 19 MR. HARRIS: Good morning, Madam Chair and 20 Members of the Board. My name's Mike Harris. I'm with 21 the Board's County Assessed Properties Division. 22 And to my immediate left is Issac Cruz with the 23 County Assessed Properties Division and to Isaac's left 24 is Ladeena Ford with the County Assessed Properties 25 Division. 26 As Madam Chair stated, we do have three items 27 before you today. The first two items are the result of 28 the adoption by the Board last year directing staff to 4 1 conduct these valuation studies. You adopted the 2 guidelines and the petitions. 3 The first one is the offset lithographic 4 printing presses. The Board staff received that 5 petition in January of this year. We adopted it in 6 March. And we set up the same format that was used for 7 the prior three studies, two members of the assessors -- 8 representing the assessors, two members representing 9 industry and Mr. Cruz and myself. 10 I'd like to, first of all, thank the assessor's 11 representatives and the industry representatives for 12 their cooperation. For the assessors it was Howard 13 Greitzer and Gary Sobeck and for industry it was 14 Mr. Gerry Bonetto and Mr. Johan Klehs. 15 The factors that we have before you today were 16 agreed to unanimously by the team members. And I 17 believe Mr. Klehs and Mr. Bonetto have some statements. 18 MS. YEE: Yeah, we have two speakers. 19 Mr. Bonetto? 20 ---o0o--- 21 GERRY BONETTO 22 ---o0o--- 23 MR. BONETTO: Thank you very much, Madam Chair, 24 Members of the Board. 25 My name's Dr. Gerry Bonetto. I'm the Vice 26 President of the Printing Industry of California. It's 27 the trade association of about 2600 companies in this 28 state. 5 1 And I'm here today to urge your yes vote on the 2 staff recommendation on offset lithographic printing. 3 The petition was accepted January of 2009. It's been a 4 pretty arduous process, but I think cooperative and also 5 fruitful. And we -- we finally wrapped it up and came 6 to some conclusions in the last month or so, I think, 7 that everyone could agree upon. 8 A number of factors, though, I think have led 9 to us to come before the Board that I could just mention 10 very quickly. One is technological changes in the 11 industry, we're going to much more digital printing. 12 There are difference in marketing strategies from te 13 purchaser's end, which call for different kinds of 14 machinery or equipment. 15 There's been a lot of consolidation and closure 16 of plants because of the economy in the last five years, 17 I think it's impacted us. 18 And there's been a shift in the purchase of 19 used equipment in foreign markets and that has really 20 caused an excessive amount of used equipment in the -- 21 in the marketplace. 22 All these factors have led us to go to -- to 23 petition the Board to look at the separate valuation 24 factors for offset lithographic presses. 25 And I wanted to emphasize one thing, it only 26 specifically deals with offset presses. It doesn't deal 27 with any equipment leading up to the actual putting of 28 ink on paper, the pre-press we call it, or the post 6 1 press, which are the finishing and enhancing features. 2 So, it's a fairly narrow subject matter. And I think 3 for that reason we feel very confident that we've come 4 to a proper conclusion of what the factors should be. 5 So, I would appreciate your vote on this. 6 MS. STEEL: Thank you, Mr. Bonetto. 7 We have a second speaker, Mr. Johan Klehs. 8 ---o0o--- 9 JOHAN KLEHS 10 ---o0o--- 11 MR. KLEHS: I'm just representing the printing 12 industry and also ask for your yes vote on the staff 13 recommendation. 14 MS. YEE: Madam Chair? 15 MS. STEEL: Any comments? 16 Yes? 17 MS. YEE: I'm happy to move adoption of these 18 guidelines. 19 I just want to thank the staff. We -- 20 MR. HORTON: Second. 21 MS. YEE: -- I don't think we knew this at the 22 time that we put this process in place, but it really 23 has turned out to be a very, very good process in terms 24 of the team effort with the assessors and the industry, 25 but really to the staff's diligence for really working 26 with -- trying to get the best data available -- really 27 to the industry fro providing the best data available. 28 So, really appreciate the cooperation. 7 1 MR. BONETTO: Thank you. 2 MR. KLEHS: Thank you. 3 MS. STEEL: Anyone else? 4 MR. LEONARD: Good job, thank you. 5 MS. STEEL: Thank you very much for your good 6 job. 7 So moved by Betty -- 8 MR. HORTON: Second. 9 MS. STEEL: -- Ms. Yee and second by 10 Mr. Horton. 11 MS. OLSON: Mr. Horton. 12 MS. STEEL: Yeah. 13 MR. HORTON: That will work. 14 MS. STEEL: That motion's been adopted. 15 We have a second item here, it's the adoption 16 of valuation factors of document processors this time. 17 Mr. Harris? 18 MR. HARRIS: Yes. The staff received the 19 petition for this study back in September and we adopted 20 it September of last year and adopted it May of this 21 year. 22 Once again I'd like to thank both the 23 assessor's representatives and industry's 24 representatives for their cooperation in working with 25 staff. 26 For the assessors it was Howard Greitzer and 27 Bruce Hastings and for industry it was Ben Clark and 28 Dick Johnson. 8 1 We came to a unanimous agreement on the 2 studies -- the factors for the document processors. But 3 in the course of the study, the subject of high speed 4 production printers came up. 5 And, as Mr. Bonetto stated, that is a class of 6 property that is coming onto the scene and kind of 7 bridges both these studies. And we -- we gave 8 assurances to the industry that we would continue 9 working with them to collect data and, hopefully, come 10 back in April of next year with a recommendation for 11 high speed production printers. 12 So, with that, I ask for your consideration on 13 these factors. 14 MS. STEEL: Thank you, Mr. Harris. 15 Any comments? 16 Is there a motion? 17 MS. YEE: Move to approve the staff 18 recommendation. 19 MR. HORTON: Second. 20 MS. STEEL: Ms. Yee making the motion and 21 second by Mr. Horton. 22 And it's been adopted. 23 We have a third item here and it's adoption and 24 authorization to publish a revised Assessor's Handbook 25 Section 581, Equipment Index and Percent Good Factors. 26 And Mr. Harris? 27 MR. HARRIS: Okay. First of all, let me -- I 28 think our recommendations or our alternatives may have 9 1 been confusing because of the two studies we had before 2 you. 3 But since you did adopt the two studies, the 4 staff's recommendation is now Alternative 4. 5 The 581 is a -- 6 MS. STEEL: Is that including those two -- 7 MR. HARRIS: Right, right. 8 581 is updated each year with current data that 9 staff receives. And along with that we've incorporated 10 from last year the non production computer study that 11 the Board adopted back in April and along with the two 12 studies that you just adopted today. 13 MS. STEEL: Any comments? 14 A motion? 15 MR. LEONARD: Move alternative 4. 16 MR. HORTON: Move to adopt. 17 MS. STEEL: Mr. Leonard making motion and 18 Mr. Horton making second. 19 And motion has been adopted. 20 And this concludes our Property Tax Committee. 21 Thank you very much. 22 MR. HARRIS: Thank you. 23 24 ---O0O--- 25 26 27 28 10 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 DECEMBER 15, 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 pages 1 13 through 10 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: March 15, 2010 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 11