1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 APRIL 13, 2010 9 10 PUBLIC HEARING 11 F3 PROPERTY TAXPAYERS' BILL OF RIGHTS HEARINGS 12 13 14 15 16 17 18 19 20 Reported by: Juli Price Jackson 21 No. CSR 5214 22 23 24 25 26 27 28 1 1 2 P R E S E N T 3 4 For the Board Betty T. Yee of Equalization: Chair 5 Jerome E. Horton 6 Vice-Chair 7 Barbara Alby Acting Member 8 Michelle Steel 9 Member 10 Marcy Jo Mandel Appearing for John 11 Chiang, State Controller (per 12 Government Code Section 7.9) 13 Diane G. Olson 14 Chief, Board Proceedings Division 15 16 17 ---oOo--- 18 Todd Gilman Taxpayer Rights 19 Advocate 20 21 Mark Sutter Taxpayer Rights 22 Advocate 23 ---o0o--- 24 25 26 27 28 2 1 INDEX OF SPEAKERS 2 ---o0o--- 3 Name Page 4 Joseph Kelly 5 5 Mary Stoffel 13 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 APRIL 13, 2010 4 ---oOo--- 5 MR. GILMAN: Now we'll move on to the Property 6 Taxpayers' Bill of Rights Hearings. 7 MS. YEE: Okay. 8 MR. GILMAN: Individuals have the opportunity 9 to present their ideas, concerns and recommendations 10 regarding legislation, the quality of agency services 11 and other issues. 12 MS. YEE: Mr. Gilman? 13 MR. GILMAN: Yes? 14 MS. YEE: Hold on. 15 MR. GILMAN: Okay. 16 MS. YEE: The Members are desiring a five 17 minute recess, let's go ahead and do that. 18 MR. GILMAN: Okay. 19 MS. YEE: Thank you. 20 (A recess was taken.) 21 MS. YEE: Let us call the meeting back to 22 order. 23 Mr. Gilman? 24 MR. GILMAN: Thank you, Madam Chair. Todd 25 Gilman, Taxpayers Rights Advocate with the Board of 26 Equalization. 27 This is the Property Taxes Taxpayers' Bill of 28 Rights Hearing for Sacramento. 4 1 Individuals have the opportunity to present 2 their ideas, concerns and recommendations regarding 3 legislation, the quality of agency services and other 4 issues related to the Board's administration of its tax 5 programs, including State and County property tax 6 programs and any problems identified in the Taxpayer 7 Rights Annual Report. 8 Our first speaker is Mr. Joe Kelly. 9 Mr. Kelly? 10 ---o0o--- 11 JOSEPH C. KELLY 12 ---o0o--- 13 MS. YEE: Good afternoon, sir. 14 MR. KELLY: Good afternoon. 15 MS. YEE: If you will introduce yourself 16 formally for the record? 17 MR. KELLY: Yes, my name's Joseph C. Kelly. 18 MS. YEE: Okay, please proceed. 19 MR. KELLY: I'm sure if you have my letter of 20 March 23rd, 2010, but I'll be, hopefully, brief and kind 21 of highlighting the issues of it. 22 Recently I had a -- I had an adventure. And 23 it was certainly a learning experience. And it's a 24 learning experience that I hope that my passing on to 25 you folks will help someone else as a taxpayer not have 26 to go through it. 27 Over the years information expands, but lacks 28 comprehensive directions and this is what I'm looking at 5 1 for a request of directions for a filing for judicial 2 review in the Superior Court for the benefit of the 3 taxpayer. Your Assessment Appeal Manual and your 4 Taxpayers' Rights Publication 30 have expanded in the 5 information involved in it, but it does not give the 6 direct linkage or exact protocol. And I found this to 7 be a very harmful situation. 8 I've found too many attorneys that are un -- do 9 not -- have no knowledge of property tax rules and Board 10 of Equalization protocol for going forward to a judicial 11 review. And I think that if this is put into the -- 12 both the manual and the Assessment Appeals -- the 13 Assessment Appeals Manual -- excuse me, the Assessment 14 Appeals Manual and Publication 30, it will be helpful. 15 One other -- I have about four things. There 16 is Public Resources Code 4290 and 4291, defensible 17 space, that's under Cal Fire. It is a State mandate, 18 but I can't get anyone to answer me if it is an 19 enforceable restriction of use of land. And I say that 20 because within its confines it says that if you have a 21 single species of trees, you can have them up closer to 22 your house, but if you have a single species of trees -- 23 I am sorry, multiple species of trees, they have to meet 24 the defensible space area. You are also limited in 25 certain footages around your house or any building of 26 defensible space of a setback of 100 feet. In my 27 particular interest there is about a 5800 square foot 28 clearance that I do. And I do it to scorch the earth, I 6 1 use a herbicide, so, that come harsh winters or 2 summertime that I don't have anything to catch fire. I 3 have trimmed my trees up as they request to 10 foot in 4 height so there is nothing hanging down to catch any 5 if -- should there be any understory. 6 The second issue under enforceable 7 restrictions, FEMA. Now, I know this is not California 8 government, it's Federal Emergency Management 9 Association under the a federal government, but they 10 have come into California with lot of -- I don't know, 11 just they've been doing surveys of properties. They 12 came into Calaveras County in 1988, did a 1990 report. 13 This particular report had a statement of protocol the 14 way they did their things to the two rivers that they 15 were looking at and it said it had to be an unobstructed 16 flow. So, this was how they measured for any flood 17 hazard was that no obstruction in that riverbed. 18 Well, I have a piece of property that they 19 claim, well, a hundred year flood. Well, I've been 20 having a hundred year flood for the last five years and 21 I've had it five times this year. And it's because of 22 two -- a dam that's in the riverbed with a raised 23 roadbed, it's a secondary damming effect and no one 24 wants to pay attention to it -- FEMA nor the County of 25 Calaveras nor the Board of Equalization of Calaveras nor 26 the Assessor of Calaveras. 27 Within this also comes another point of the 28 Natural Hazard Disclosure Statement. This was something 7 1 that was put into regulations, I believe, by the DRE, 2 but I think it's a point to be looked at, possibly from 3 this agency, and with a -- I don't want to say crossed 4 lines, but to gain information from the DRE. 5 But page 1 of this Natural Hazards Disclaimer 6 is -- on page 1 it has a disclaimer, "Property not 7 subject to physical inspection." But they go on in 8 their booklet or their paperwork and they list out fire, 9 flooding and the different things. And they're looking 10 at FEMA's maps and other maps, USGS maps and this type 11 of thing, to gain their information to say, "Okay, 12 you're all in the same boat." And that's not right. 13 I've been fighting well over -- I guess, 14 probably almost a year now with FEMA. And they have 15 finally come out and done a survey here this -- a few 16 months ago to do two cross sections of my property. I 17 haven't heard anything back from them, I don't know what 18 they're going to do. 19 MS. OLSON: Time has expired. 20 MS. YEE: Continue, if you'll summarize the 21 rest of your comments? 22 MR. KELLY: Okay. Well, just one last thing 23 that I'd like to see is in the -- in the property tax 24 rules under construction in one area, it says, it -- it 25 states that the Board of Equalization, meaning the 26 County Board of Equalization, have a special expertise 27 status granted by the constitution. 28 Well, I think required training is necessary 8 1 for County Board of Equalization Members because that 2 expertise granted is not working. 3 And back to the -- just one step back to the 4 restriction of land use. Should you decide to -- that 5 this can move forward, that I would like to see it 6 referenced in property tax rules so that the assessors, 7 appraisers for the counties, are knowledgeable of it and 8 that it is -- they're instructed to put it into their 9 training programs, if they're not being trained directly 10 by the Board of Equalization State. 11 Thank you. 12 MS. YEE: Thank you very much, Mr. Kelly. 13 Questions, Members? Comments? 14 Mr. Horton? 15 MR. HORTON: Thank you. Very enlightening. 16 MR. KELLY: Thank you, sir. 17 MR. HORTON: I appreciate that -- quite a bit 18 of information was shared there. 19 I would encourage staff to get the tape, listen 20 to the recommendations I heard. Within your testimony 21 there was County and FEMA and so forth, but, you know, I 22 think what we ought to try to do is, where we can, share 23 that information with the appropriate agencies and see 24 if we can help get a response and just solidify your 25 inquiries. 26 And where there is something that we can do to 27 make it easier, particularly the lack of a comprehensive 28 direction, because if you as the taxpayer feels that 9 1 there isn't an appropriate direction there, we should 2 attempt to try to help. 3 And here's the other good part of -- I don't 4 know how many other individuals are coming to testify 5 today -- but you represent all of them today. So, to 6 that degree, I personally am going to give your 7 testimony a lot more credibility. We see you as 8 representing the people of State of California today. 9 So, thank you very much for coming. 10 MR. KELLY: Thank you. 11 MS. YEE: Thank you, Mr. Horton. 12 Other comments, Members? 13 Ms. Mandel? 14 MS. MANDEL: I gather from what you're saying 15 that your question is whether the defensible space and 16 the other requirements are enforceable restrictions on 17 the land that should be taken into account in valuing 18 your property for property tax purposes? 19 Is that the -- 20 MR. KELLY: Yes. 21 MS. MANDEL: -- question? 22 MR. KELLY: Yes, the issue of defensible space, 23 the issue of flooding. 24 I have a 20 acre parcel, 20 acre parcel that I 25 purchased. I was given this Natural Hazards Disclosure 26 Statement. California disclosure statements are much 27 more stringent than this disclosure statement. I'd like 28 to see this Natural Hazards thrown out and California's 10 1 disclosure statement put in its place. 2 But when it -- I bought this property in 3 September of 2005, December 31st of 2005 we had a phone 4 call and a contractor that I was going to use -- he 5 called and said, "You folks ought to be here selling 6 whitewater rafting tickets." 7 So, I went up January 1st, 2006. I got there. 8 There wasn't anything going on. It had subsided. I 9 went back over on January 2nd at 3 o'clock in the 10 afternoon and I saw the flooding effect. And this was 11 all caused by this dam, this raised roadbed, which I 12 have to add -- if I may add State Water was advised of 13 it a complaint was filed. They came out, did a complete 14 survey of the property to include GIS, GPS depth of the 15 pond, the whole bit. 16 And they made threatening statements to the 17 landowners, who -- the whole reason I haven't filed a 18 lawsuit against them is they bought the property without 19 knowledge also. They were told this was legal. So, I 20 haven't done anything in that respect. 21 And then the State, in its wisdom, all of 22 sudden said, "We're done," and they walked off. Now we 23 can't even get into their GIS or GPS information. 24 So, it's been -- it's been an interesting 25 situation, but, yes, ma'am. 26 MS. MANDEL: Okay. So, that's -- it sounds 27 like your -- is the dispute that the assessed -- the 28 dispute with the County, is it that the assessment is 11 1 being based on what you paid for it and you think you 2 overpaid for it because of these different items and 3 that the assessment should be lower? 4 MR. KELLY: Yes. 5 MS. MANDEL: Okay. Because if there's a legal, 6 you know, question in there that was -- where there was 7 a written request for something from the Legal staff in 8 terms of what their view might be, but it sounds like 9 you have an overall sort of valuation dispute that 10 you're trying to fuss with the County about, but as to 11 whether certain types of things are or are not in Board 12 Legal staff's view restrictions on the land that have to 13 be taken into account in valuing property for whatever 14 it is section, I forget, you know, that's -- that's -- 15 the legal staff does issue written opinions in response 16 to written requests, but those are not, you know, 17 binding on County Assessors and that sort of thing. 18 But that -- that's really your question? 19 Mr. Gilman, that might be something to discuss with him. 20 I don't know if it's the sort of thing that Legal can 21 address or not, but that's what I was hearing was that 22 he was asking for something like that. 23 MR. GILMAN: Ms. Mandel, I've been in contact 24 with the County Assessed Property Tax Division, as well 25 as Legal, and we're continuing to work with Mr. Kelly on 26 his issues. 27 MS. MANDEL: Oh, okay. 28 MR. GILMAN: So, we have already been working 12 1 behind the scenes on this. 2 MS. MANDEL: Okay, thank you. 3 MS. YEE: Thank you very much, Mr. Gilman. 4 Thank you, Mr. Kelly. 5 MR. KELLY: Thank you. And I do appreciate 6 your staff and you folks, Mr. Gilman and his staff and 7 Mr. Kinnee also, so, thank you very much. 8 MS. YEE: Thank you. 9 Mr. Gilman? 10 MR. GILMAN: Okay, our next speaker, Ms. Mary 11 Stoffel. 12 Mary? 13 ---o0o--- 14 MARY ALICE STOFFEL 15 ---o0o--- 16 MS. STOFFEL: It will take a minute to get 17 down. As you get a little older, you get a little 18 weaker. I've been sitting here a long, long time. 19 I don't feel as well prepared as I know I 20 should be, however, I do have some questions I really 21 want to ask you. 22 MS. YEE: Okay, Ms. Stoffel, why don't you come 23 on up and take a seat? 24 We'd love to hear you through the microphone. 25 MS. STOFFEL: Thank you. 26 MS. YEE: And thank you for your patience. 27 If you could begin by formally introducing 28 yourself? 13 1 MS. STOFFEL: My name is Mary Alice Stoffel. 2 MS. YEE: Okay. 3 MS. STOFFEL: And I have family property in 4 San Diego. This -- the property is under a life estate, 5 joint tenancy, document. All of this part has been 6 solved. We, at one type had escape taxes and a lot of 7 things that were imposed on the property, but I think I 8 pretty well proved to them that we should be under 61.3 9 -- or 63.1 and parent child exclusion. So, a lot of 10 that has been solved. 11 My situation now is I want to push the tax base 12 back as far as I possibly can. My parents -- my dad 13 bought the property in 1942. The home was built in '41, 14 I guess, '42 and 43 the home was built. We've never 15 changed -- there's never been any change in ownership of 16 the property. 17 Dad died in 1982. Mother died in 1993. The 18 property, I think, should be pushed back to the 1975 19 base year value. 20 I've had Mark Sutter work with me and he has -- 21 they have to go back into the records, microfilm 22 records, to find the 1975 base year value. So, that's 23 been a little bit of a challenge to do that. 24 When I asked the San Diego people to tell this 25 to me, they said that, "Well, we'll charge you $50 an 26 hour." Well, I didn't know how many hours it's going to 27 take them to do it. So, I didn't go with that one, but 28 Mark got it for me. 14 1 So, the base year value in 1975 was $9,375. 2 Now my question is this, I have read that a cut-off 3 date -- I hope I'm not too jumbled here -- but a cut-off 4 date for, let's see, increased cut-off date for 5 reassessment or general raise in reassessment was 6 June 30th, 1981. The fiscal year of 1980-81 ended in 7 August 25th, 1981. The net assessment for this fiscal 8 year was $8,575. Now, I'm told that that figure, 9 according to Prop. 13 then, should be multiplied by four 10 to give you a net assessment of $35,128. And I question 11 that. 12 I'm sorry, I don't have the -- I haven't delved 13 into the 110 law stating whether they should multiply 14 that 8,575 base year value times four or not. 15 And this is the question. And if so, why? 16 Because of the 1981, June 30th cut-off date, I'm a 17 little bit puzzled. And I admit I have not done the 18 research on that. 19 Can somebody tell me why that $8,575 should be 20 multiplied by four for a base year value of 1975? 21 MS. MANDEL: Mr. Sutter or Mr. Gilman? 22 MR GILMAN: Yes. 23 MS. MANDEL: Was that -- did that have to do 24 with the percentages of true value that used to be 25 assessed or do you know you an answer? 26 MR. GILMAN: I've invited Mark Sutter from my 27 staff to come up here and comment on this. 28 Mark? 15 1 MS. MANDEL: Save us because we're not 2 answering. 3 MR. SUTTER: Not a problem. 4 Mark Sutter, Taxpayers' Rights Advocate's 5 Office. 6 Ms. Stoffel and I have been working on this for 7 about four years now. We thought we had this resolved. 8 She keeps bringing the numbers back up and I think we're 9 just having some communication problems. 10 In 1977-78, when the Prop. 13 passed, they 11 rolled the values back to what they were in 1975. 12 However, in '75 what was on the roll reflected a 25 13 percent assessment ratio. So, what you have to do is 14 take the '75 roll, multiply it by four. 15 The County, when they provided the numbers to 16 me, they were only able to go back to 1978, they were 17 comfortable in '78 that they had used the right numbers. 18 They didn't have the '75 numbers at that particular time 19 to provide to me. 20 Consequently, they did provide it to me and I 21 provided that to Ms. Stoffel. It does show that the '78 22 values forward are the 1975 base values, however. 23 And I think we're just kind of stumbling over 24 the math and why it changed at certain times periods. 25 And I am not sure that there is any clean 26 explanation as to why it happened. But it's ultimately, 27 from my recollection or my understanding, it all appears 28 to be back to the '75 base correctly. 16 1 MS. STOFFEL: May I -- 2 MS. YEE: Yes, please? 3 MS. STOFFEL: -- put a word in here? 4 According to Rule 305.5, base year value 5 presumption, A, the Appeals Board decision that the full 6 cash value, as defined in Section 110 of the Revenue and 7 Taxation Code is lower than the adjusted base year 8 value, in parentheses, the base year value adjusted to 9 reflect inflation as prescribed by Section 110.1, 10 subdivision f of the Revenue and Taxation Code will not 11 establish a new base year value unless the base year 12 value is the subject of the appeal. 13 I have not made any appeal yet. But what I 14 read in this law too, that the -- the 110.1 of Revenue 15 and Taxation Code is lower than the adjusted base year 16 value of 110 -- I am sorry, 110 is lower than 110.1, 17 which was after Prop. 13. 18 So, the base year value of 1975, before 19 Prop. 13, is what I think would be justified for taxing 20 this property. 21 And I think that figure would be different -- I 22 know it would be different than applying 110.1 after 23 Prop. 13. 24 Like I admit, I haven't done the study on this 25 the way I know I should and yet my time -- 26 MS. YEE: That's fine. 27 MS. STOFFEL: You're here once a year. 28 MS. YEE: Well, actually, we're here year 17 1 round, but this is the public process is once a year -- 2 MS. STOFFEL: Right. 3 MS. YEE: -- public hearing. 4 And I think -- Mr. Sutter, you're engaging -- 5 MR. SUTTER: Well, it is confusing. And it's 6 confusing for a variety of reasons. 7 But I think if she does take some more time and 8 looks at it, I think she'll be able to understand what 9 it is, the numbers and how they crunched out properly. 10 I am not quite sure of the citations that she's 11 giving as to how they're relevant. I don't believe they 12 are. I believe that -- if you go back to the '75 base 13 value and factor that up, you end up with what's on the 14 roll today. 15 So, I am sure there is anything else thumb 16 crunching I do to come a different numbers, so -- 17 MS. YEE: Okay. What would you propose that we 18 do from this point? 19 MR. SUTTER: We'll continue to have a dialogue 20 with Ms. Stoffel until she feels comfortable with the 21 information. 22 And we have been in constant contact with the 23 County to get the information -- 24 MS. YEE: Which county are we talking about? 25 MR. SUTTER: San Diego. 26 MS. YEE: Okay. 27 MR. SUTTER: And they've been really good about 28 giving me the information when I need it, so -- 18 1 MS. YEE: Okay. 2 MR. SUTTER: Ms. Stoffel has most of the 3 information, if not all of the information that I have 4 received. So, it's just a matter of providing it. 5 MS. STOFFEL: And I'll continue to go to the 6 law library. 7 MR. SUTTER: Yes, ma'am. 8 MS. YEE: We appreciate your diligence on this 9 matter, Ms. Stoffel. 10 Let me -- we will ask Mr. Sutter to continue to 11 work with you. You have a lot of information that 12 you've obtained that let us try to help you work 13 through. 14 MS. STOFFEL: I appreciate their help too. 15 MS. YEE: Okay. 16 MS. STOFFEL: Both of them have been really 17 great. 18 MS. YEE: Great. 19 MS. STOFFEL: Okay, thank you. 20 MS. YEE: Thank you very much for coming before 21 us and for your patience today. 22 MS. STOFFEL: Yes. 23 MR. SUTTER: Thank you very much. 24 MR. GILMAN: Okay, we had one other speaker, 25 but she wasn't able to stay, Ms. Lee Martin. 26 Ms. Martin had two valuation issues on two 27 pieces of property that she owned, one in Madera County 28 and one in Alameda County. 19 1 We'll continue to work with the taxpayer and 2 the County to help resolve her issues. 3 MS. YEE: Do you know what the nature of the 4 issues were? 5 MR. GILMAN: Let's see here -- I have some 6 notes. 7 I think she submitted some comps in terms of 8 the values of each property that she had in each county. 9 And there was some -- either misunderstanding or not 10 meeting of the minds in terms of the values that the 11 taxpayer came up with, first what the county was 12 indicating the property was worth. 13 It sounds like kind of a Prop. 8 type issue, 14 maybe, but I don't know if she's filed an appeal or not. 15 So, we haven't been able to follow up on hers. 16 MS. YEE: You said Alameda County -- and what 17 was the -- 18 MR. GILMAN: Alameda County and Madera County. 19 MS. YEE: Madera okay -- all righty. 20 MR. GILMAN: That's the -- that's all of the 21 scheduled speakers we have. 22 Again with the Board's permission, if there are 23 anybody that would like to come forward and make a 24 public comment at the Property Taxpayers' Bill of 25 Rights -- 26 MS. YEE: Okay. Any members of the audience 27 wish to come forward during this Property Tax Taxpayer 28 Bill of Rights hearing? 20 1 Okay. 2 MR. GILMAN: Okay, that concludes the Taxpayer 3 Bill of Rights hearing in here Sacramento. 4 Thank you. 5 MS. YEE: Thank you very much, Mr. Gilman. 6 I think for the benefit of Mr. Horton and 7 Ms. Alby, do you want to just explain to us how we 8 generally follow up with some of these matters that come 9 up? 10 MR. GILMAN: Right. What we'll do is we'll go 11 through and sketch the assignments accordingly and work 12 with the appropriate departments and report back to the 13 Board with the progress that we've made on each of the 14 items that we've discussed today. 15 MS. YEE: Okay, very well. Thank you very 16 much, Mr. Gilman. 17 MR. GILMAN: Thank you. 18 ---o0o--- 19 20 21 22 23 24 25 26 27 28 21 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 APRIL 13, 2010 I recorded verbatim, in shorthand, to the 10 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 21 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: June 7, 2010 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 22