BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT MAY 26, 2010 ITEM M1 OTHER CHIEF COUNSEL MATTERS REQUEST FOR AUTHORIZATION TO FILE AMICUS CURIAE BRIEF 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 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 Government Code 12 Section 7.9) 13 Joann Richmond Property Tax Appeals Analyst 14 Board Proceedings Division 15 Board of Equalization 16 Staff: Robert Lambert Tax Counsel IV 17 Richard Moon 18 Tax Counsel 19 20 ---oOo--- 21 22 23 24 25 26 27 28 2 1 Sacramento, California 2 May 26, 2010 3 ---oOO--- 4 MS. RICHMOND: Our next item is Other Chief 5 Counsel Matters, Item M1, Request for Authorization to 6 File Amicus Curiae Brief. 7 Mr. Lambert and Mr. Moon will introduce these 8 matters. 9 MS. YEE: Good afternoon. 10 MR. LAMBERT: Good afternoon. The -- we're 11 here to request the Board's authorization to file an 12 amicus brief in support of the Counties, particularly 13 Santa Barbara County, in a declaratory relief action in 14 a consolidated group of cases in Orange County Superior 15 Court challenging the fractional aircraft ownership 16 statutes that the Board supported when it came through 17 here in the Legislative Committee. 18 The -- the only real comments I've had were 19 with respect to filing an amicus brief in the trial 20 court, and I wanted to address that and then take any 21 questions the Board Members have. 22 We're -- we're recommending this because the 23 County asked -- Counties asked us and because the Board 24 had supported it. With respect to filing an amicus 25 brief in the trial court, Witkin, which is a authority 26 on the California law, states that it's in the 27 discretion of the trial court, that it's a -- there's 28 two or three cases on it, it has -- it's a type of 3 1 pseudo intervention motion, so it's within the 2 discretion of the trial court. We would have to 3 petition before we filed. 4 I know for a fact that the Board has filed 5 amicus briefs in the trial court in the past on a few 6 occasions. I think once with the State Lands Commission 7 quite a while ago. I know we've had a number of them 8 filed against us in the trial court. 9 It's not unusual. You see it -- we certainly 10 don't have a policy against it but again it's within the 11 discretion of the Board. 12 We would ask that if we're not allowed to file 13 an amicus brief in the trial court today we be given 14 authorization to file one eventually in this -- Court of 15 Appeals if it gets there, though. 16 And with that I'd ask if there are any 17 questions or comments. 18 MS. YEE: Okay. 19 MS. STEEL: Madam Chair. 20 MS. YEE: Thank you, Mr. Lambert. Ms. Steel. 21 MS. STEEL: I -- I just want to make clear 22 that, you know, Mr. Lambert, that Board support it but 23 it was the majority of the Board, not all of them. 24 MR. LAMBERT: Certainly. 25 MS. STEEL: Yeah. I just want to make it 26 clear. Thank you. 27 MS. YEE: Okay. Thank you. Ms. Alby. 28 MS. ALBY: A couple questions. What is the 4 1 need for us to do this at this point? 2 MR. LAMBERT: The need for -- I guess the need 3 is -- or the Counties felt the need for us to come in 4 and state the policy reasons why it's a good idea to 5 have this statute in an area which was escaping 6 taxation, and also we could, you know, give our opinions 7 on why the statute is valid and basically support the 8 County in their position. 9 MS. ALBY: But couldn't they actually handle 10 this on their own, this -- they're going to do it, 11 anyway. I mean, I'm really conflicted here on why we 12 have to get involved at this point. 13 I mean, what's -- what's our novel argument, I 14 guess, that we have to do this? 15 MR. LAMBERT: I don't think we have a novel 16 argument, but I think that we are the Board of 17 Equalization and we have a sort of authority with 18 respect to County assessments. They might look to us to 19 give our Board -- a Court might look to us to give our 20 opinion and we would certainly give our, you know, 21 honest, unvarnished opinion on it. 22 And it happens that Courts have asked us for 23 our opinion on things. 24 MS. YEE: Yeah. 25 MR. LAMBERT: It's not unusual. I'm not sure 26 we're ever -- it's required but for instance in the 27 Loeffler case essentially the Courts asked for our 28 position. So the fact that you are the Board, even if 5 1 your position isn't novel, your arguments aren't novel, 2 your position is important to the Court on -- sometimes. 3 If that answers the question. 4 MS. ALBY: -- either the cost justifies this 5 time and place? 6 MR. LAMBERT: You know, the cost is an 7 interesting question. We -- we've been through this in 8 the last year. There's a -- there's a Department -- I'm 9 not sure the Department of Justice would be involved in 10 this. We might just handle it ourselves. 11 Both the Department of Justice and the Board 12 have overheads, and the overheads are there regardless 13 of whether they do the amicus brief or not. And 14 basically you're talking about an allocation of an 15 overhead. 16 The brief -- certainly an amicus brief in trial 17 court, given the time we have -- by the way, we may not 18 have much time to write it. It might be very short. It 19 might be a very short statement of what our position is, 20 depending upon whether the Court agrees to a two-month 21 extension of the briefing date, which has been fought 22 for a while now without an answer. 23 But we'd be -- we're going to try to handle it 24 ourselves or the Department of Justice can say they want 25 to handle it. But I don't think there's going to be any 26 real marginal cost to either agency for this -- this 27 amicus brief. And I don't think it's going to be long. 28 It's going to be mainly a statement of our support for 6 1 the concept, that this was an untaxed area. The 2 Legislature wanted to tax it consistent with principles 3 in other areas and that's the intention of the 4 Legislature and that's what the Court should look to. I 5 think that's what -- 6 MS. ALBY: I think this barely passed the 7 Legislature, actually. It wasn't that clear cut. 8 MR. LAMBERT: I'm sorry, I -- I don't follow 9 the -- follow that. 10 MS. ALBY: I said the -- the point being -- 11 MR. LAMBERT: Yeah. 12 MS. ALBY: -- I just don't know -- for the 13 record I don't understand why we're doing this at this 14 time. 15 MS. YEE: It is -- the statute's now in effect 16 on fractionally-owned aircraft and to the extent that 17 this Board has oversight jurisdiction over assessment 18 practices in all of our counties I think we should weigh 19 in. We haven't been asked, but I think we've had an 20 interest that's -- it's -- it's an issue of statewide 21 interest, certainly. 22 Ms. Mandel. 23 MS. MANDEL: Well, it -- I mean, where's -- 24 where's the California Assessors Association? It was a 25 California Assessors Association sponsored bill. You'd 26 think that they would be, you know, supporting counties 27 that have individually been sued on a dec. relief 28 action. I mean it is -- the last time that I remember a 7 1 request coming in for the Board to participate at the 2 Trial Court, the Board waited till the Court of Appeal. 3 And it almost seems then that any sort of 40 dec. relief 4 action against a county has the potential for sort of 5 statewide impact. 6 But it was a California Assessors Association 7 sponsored bill. Have they weighed in at all? 8 MR. LAMBERT: I don't know. I don't have any 9 information that they have or they will or they won't. 10 MS. YEE: Are you looking to see the 11 Association's participation before the Board weighs in? 12 MS. MANDEL: Well, it's -- you know, it -- it 13 was -- it was their bill and it was something that they 14 were working on with the Legislature. I mean if what 15 Mr. Lambert is talking about is the, you know, policy 16 reasons for doing the bill, those are -- you know, I'm 17 not sure what this brief would say, but -- you know, is 18 that within the -- what's -- what's within the sort of 19 purview of the Board or is it really the Assessors 20 who put it -- put it forward? 21 MR. LAMBERT: Well, we've analyzed the bill. 22 You know, we've discussed the bill. We discussed it 23 sitting here I think a few years -- two or three years 24 ago. We've read the legislative history. I think we 25 understand the policy issues as well as anyone, as well 26 as they do. 27 But, you know, yeah, if -- if we need to have 28 them weigh in we may not be able to file because of time 8 1 is relatively limited, unless it's extended. 2 MS. YEE: Did -- was there a -- an LTA pursuant 3 to the legislation -- or subsequent to the enactment of 4 the legislation? 5 MR. LAMBERT: No, we have -- we've -- there's 6 been some material on it but I don't think there's been 7 an LTA. 8 MS. YEE: Okay. 9 MR. LAMBERT: But we've done the form. 10 You know, we've -- 11 MS. YEE: Right. 12 MR. LAMBERT: -- we're -- we're not deeply 13 involved in it yet but we're getting more involved, and 14 I think obviously they look at it when they have a 15 survey. 16 MS. YEE: Right. 17 MR. LAMBERT: And so they're -- you know, 18 they're building up to it. 19 MS. MANDEL: And what about the issue that 20 there's -- I mean the case is in discovery, right? 21 There's not really a record? What -- 22 MR. LAMBERT: We know what the issues are. 23 We've read the -- the complaint and things. We pretty 24 much know what the legal issues are. 25 MS. MANDEL: There are not going to be any 26 factual issues at all, it will be -- 27 MR. LAMBERT: It's declaratory relief. I think 28 it's a facial attack on the statute. And as you know, a 9 1 facial attack on a statute, they would have to establish 2 that the statute can't operate legally in any situation. 3 MS. MANDEL: And what's the timing again in 4 the -- 5 MR. LAMBERT: Well, see, there was -- quite a 6 while ago the parties agreed to an extension but the 7 Court hasn't agreed to it yet. So if the Court declines 8 to -- to, you know, order the extension we would have to 9 file it next week. 10 But it's possible it may not be till -- for two 11 months after that, though, depending upon what the Court 12 does. We've been kind of watching but we haven't seen 13 anything yet. 14 MS. YEE: Okay. 15 MS. MANDEL: And that's when the parties would 16 have to file, as well? 17 MR. LAMBERT: Yes, we'd try to file the same 18 date. 19 MS. MANDEL: We'd be filing amicus without -- 20 MR. LAMBERT: No, we'd have to file -- either 21 an application ahead of time or together with the brief 22 before the parties file. That's -- that's how we would 23 intend to do it. 24 MS. YEE: Okay. Anything else, Ms. Mandel? 25 MS. MANDEL: Yeah, just -- I mean, I don't know 26 the -- the circumstances of the other cases that you're 27 referring to where the -- in the past the Board was -- 28 went in on a -- at the trial court level 10 1 MR. LAMBERT: Well, I would say there's -- 2 MS. MANDEL: It seems unusual. 3 MR. LAMBERT: -- you know it's within the 4 discretion of the trial court. They might turn us down. 5 I'm just -- I'm just aware there's no policy against 6 filing an amicus brief in the trial court at the Board. 7 So it's totally -- and there's no -- there's no real 8 precedent on that. It's within what the Board would 9 like to do. 10 I'm basically here because the Board had 11 supported it during the legislative process and because 12 the Counties asked. 13 MS. YEE: Okay. Further questions? 14 Hearing none, is there a motion? 15 I -- I'll move -- 16 MS. MANDEL: Can -- 17 MS. YEE: Ms. Mandel. 18 MS. MANDEL: I don't know, it would be nice to 19 know if the Assessors Association is going to carry some 20 weight in defending their own legislation. 21 MS. YEE: Uh-huh. Why don't we put this over 22 till the end of our agenda and see if we can get a 23 read -- 24 MR. LAMBERT: Certainly. 25 MS. YEE: -- from the CAA. 26 MR. LAMBERT: Okay. 27 MS. YEE: Okay. 28 MR. LAMBERT: Will do. 11 1 MS. YEE: You can come back to us with that 2 information. 3 MR. LAMBERT: Okay. Thank you. 4 MS. YEE: Thank you. 5 ---oOo--- 6 MS. YEE: Our next item, please. 7 MS. RICHMOND: Our next item is Item M1, 8 Request for Authorization to File Amicus Curiae Brief. 9 That was put over -- 10 MS. YEE: That was -- yes. 11 MS. RICHMOND: -- to the end of the day. 12 MS. YEE: Okay, Mr. Lambert, do you have news 13 for us? 14 MR. LAMBERT: Yes, we did get some news. CAA 15 doesn't have staff counsel. They have requested a 16 volunteer. But they have not -- they're not scheduled 17 to file an amicus brief now. L. A. County is assisting 18 them with the case. They were involved in the 19 legislation, as well. Primarily perhaps under the 20 auspices of CAA. But they were -- they were involved in 21 the legislation and they're helping those -- those 22 involved Counties with the case now. 23 But CAA is not officially involved nor do they 24 have an attorney available to help. 25 MS. YEE: Okay. Mr. Horton. 26 MR. HORTON: Yeah, Madam Chair, I didn't follow 27 the vote on this, in the legislative process. This is 28 a -- a case that -- I mean, it seems like we should be 12 1 the Three Mus -- Musketeers, all for one and one for 2 all. We all ought to be engaged, everyone that was 3 involved. And just the lack of concern about this or 4 directing -- or the request of only and not all of the 5 players who were involved, and the marginal passing of 6 the legislation, gives me a little pause just to want to 7 take a look at those -- those acts to see, you know, who 8 actually participated and where the players really are 9 on this. 10 MR. LAMBERT: I think -- 11 MR. HORTON: I sort of presumed that we were 12 all on the same page, but it doesn't sound like that't's 13 the case because of your actions. 14 MR. LAMBERT: Well, I think -- I think L. A. 15 was the supporter for the legislation, perhaps under the 16 auspices of CAA. I believe it was a -- 17 MS. MANDEL: It was a -- 18 MR. LAMBERT: -- budget trailer bill. 19 MS. MANDEL: It was -- L. A. County was very 20 involved, I think. 21 MR. LAMBERT: Very involved and they're still 22 involved. 23 MS. YEE: Uh-huh. 24 MR. LAMBERT: They were the only County really 25 involved and I think they're still involved, even if 26 they were operating under the auspices of CAA. Because 27 CAA doesn't have their own attorney, they would have to 28 use someone from a County. 13 1 MR. HORTON: Do we have time -- do I have time 2 to -- to -- to call L. A. County and just assess for 3 myself their -- 4 MR. LAMBERT: Maybe. 5 MR. HORTON: -- motivation? What's maybe? 6 MS. YEE: We have to do that -- 7 MR. LAMBERT: Because there's a brief due next 8 week, but quite a while ago all the parties agreed to 9 continue the matter, but the Court has not signed the 10 order yet. 11 So if the Court signs the order, yes. 12 MS. MANDEL: Oh, I thought you said June 29th. 13 I must really have an earache. 14 MR. LAMBERT: No, next week is the due date, 15 but we had agreed -- the parties had agreed a long time 16 ago to extend it two months, but I don't believe the 17 Court has signed the order yet. 18 So maybe we can talk about it at a different 19 month, but maybe it will be too late, it's not 20 (inaudible.) 21 MR. HORTON: If all the partes have agreed, I 22 mean the Judge is -- is -- is not going to say since the 23 two of you guys did agree to continue this thing -- has 24 -- has that ever happened? 25 MR. LAMBERT: Oh, yeah. 26 MR. HORTON: And -- 27 MR. LAMBERT: Yeah, it happens. 28 MR. HORTON: Is that the case, where you got -- 14 1 MR. LAMBERT: Yeah, it happens. 2 MR. HORTON: And the Judge says no, I want to 3 act on this? 4 MR. LAMBERT: Yeah 5 MR. HORTON: Oh. 6 MR. LAMBERT: I mean, we would assume he would 7 sign it but it's not -- it's certainly not a dead bang 8 certainty. 9 MR. HORTON: Okay. 10 MS. YEE: But for the resource issue would the 11 Association weigh in? 12 MR. LAMBERT: Pardon me? 13 MS. YEE: But for the resource issue would the 14 Association weigh in, or is it just too specific to 15 certain counties? 16 MR. MOON: Well, I don't think it's necessarily 17 a -- a resource issue because they are -- they are 18 apparently helping Santa Barbara and Orange County with 19 the case -- 20 MS. YEE: Okay. 21 MR. MOON: -- you know, the people that were 22 involved to begin with, as is -- as is L. A. 23 I don't -- I don't know that -- I think if they 24 were to file an amicus in any case, not just this one, I 25 think they would need to use their County Counsel 26 because they -- again, as Mr. Lambert said, they don't 27 have their own -- 28 MS. YEE: Right. 15 1 MR. MOON: -- counsel. 2 MR. LAMBERT: I think perhaps they think that 3 the Board has more weight due to its position with 4 respect to, like you say, oversight of County 5 assessments than an association of assessors would. 6 MS. YEE: Right. 7 MR. LAMBERT: I think -- I would guess that's 8 part of their thinking. 9 MS. YEE: Well, pleasure of the Board? 10 MR. HORTON: I know, Madam Chair, I'd like an 11 opportunity just to talk to my assessor -- 12 MS. YEE: Okay. 13 MR. HORTON: -- in my County. Kind of see what 14 the thoughts are. 15 I really don't have an issue in filing an 16 amicus brief. But it's the inconsistency in how the 17 players are acting in the request and that sort of give 18 me a little pause, and the fact -- I think it was Ms. 19 Alby who brought forth that this was one of those 20 hairline things that barely got passed. That means 21 there was bipartisan opposition. I don't know what 22 caused that. So -- 23 MS. YEE: Ms. Mandel. 24 MS. MANDEL: I felt that this was part of the 25 late -- you know, budget came in, the budget -- late, 26 really late, was what I remembered. And so I don't know 27 if it was marginally passed because that's how the 28 budgets pass or -- I don't remember the details on the 16 1 particular provision. 2 MR. HORTON: Is that the case? It was part -- 3 MR. LAMBERT: It was a budget trailer bill, 4 that's for sure. I don't know what effect that has on 5 the -- 6 MR. HORTON: A budget trailer bill. 7 MR. LAMBERT: -- votes, though. 8 MR. HORTON: It was separated out? I mean, 9 you -- they sometimes separate the trailer bill out and 10 the vote's totally different. 11 MR. MOON: I'm not sure exactly how it was 12 done. 13 MS. MANDEL: Yeah. And, you know, I -- I came 14 in here today thinking that it was unusual -- very 15 unusual for the Board to go into the trial court and -- 16 which is why I had, you know, raised the question before 17 we even -- before I even saw anything from -- you know, 18 somebody from the outside. And these are dec. relief 19 actions that the statutes provide for against counties, 20 and I was concerned about, well, where -- where is the 21 CAA? It was their bill. Where -- where is L. A. 22 County, was actually one of my questions because L. A. 23 County or the other big counties -- I mean, I know 24 Orange County is a big county but the other, you know, 25 big players who were in here supporting the bill, that 26 they ought to be, you know, supporting their brethren, 27 and you're saying that L. A. County is -- 28 MR. HORTON: L. A. County -- 17 1 MS. MANDEL: -- standing -- standing behind 2 the -- the -- to help -- 3 MR. LAMBERT: Yes, they're assisting the 4 smaller counties -- you know, Santa Barbara County -- 5 MS. MANDEL: They're assisting the -- Santa 6 Barbara and Orange in the -- 7 MR. LAMBERT: Right. 8 MS. MANDEL: -- background. 9 MR. HORTON: When you say assisting, they -- 10 they're going to file an amicus brief at all? 11 MR. LAMBERT: I'm not certain about that, but 12 they're -- they have all the information on this and 13 they have access to the legal arguments. They were 14 involved in drafting the legislation, I -- I believe, 15 and they were certainly involved in explaining the 16 legislation to us. 17 So I think they're lending that kind of 18 support. I didn't hear anything about an amicus brief, 19 though. 20 MS. YEE: Today? 21 MR. HORTON: Yeah. 22 MS. YEE: Yeah, we can put it over. You want 23 to call now? 24 MR. HORTON: Come -- come back. Let me make a 25 phone call. 26 MS. YEE: Okay. Let's -- let's defer action on 27 this momentarily. Mr. Horton is going to check with . 28 L. A. County officials and come back. 18 1 Actually, why don't we recess for five minutes 2 so he can do that. 3 (Whereupon a short recess was taken.) 4 MS. YEE: Let's reconvene the meeting. 5 Mr. Horton, you want to report on your 6 attempts? 7 MR. HORTON: Yes. You know, I sought to 8 contact the -- the interim city -- City Assess -- I 9 mean, yeah, County Assessor and they were not able to 10 get back to us in this short period of time. 11 So -- 12 MR. LAMBERT: I have a proposal. That, you 13 know, if the Board is uncomfortable right now, given 14 that it's a trial court, not a Court of Appeal, you'd 15 have another bite of the apple, presumably. 16 MR. HORTON: Yeah, that was my -- 17 MR. LAMBERT: One. Two, I think the odds are 18 more than 50 percent the Judge will extend -- the 19 briefing schedule because for one thing there's a health 20 issue for one of the attorneys. 21 So, I would propose based on those two -- two 22 factors that you simply put it over to the Culver City 23 meeting and then you might be more -- 24 MS. YEE: We can't wait till the July meeting? 25 No, -- 26 MR. LAMBERT: I think June -- I think Culver 27 City would be better -- 28 MS. YEE: All right. 19 1 MR. LAMBERT: -- safer for us. 2 MR. HORTON: I mean, I can -- that's plenty of 3 time for me. I don't know whether there is -- 4 MS. YEE: Okay, that would be fine. Then let's 5 see what kind of information we can get in the interim. 6 MR. LAMBERT: Okay. And while we're doing 7 that, if they're not com -- if the Board is not 8 comfortable filing a trial court amicus brief I'd ask 9 for permission then to file a -- might as well ask for 10 permission to file an, you know, amicus brief in the 11 Appeals Court, anyway, so we at least have that covered. 12 We can tell them that. 13 Or maybe that's premature. 14 MS. YEE: I think that's premature. 15 MR. HORTON: Yeah. 16 MS. YEE: Let's -- let's not -- 17 MR. LAMBERT: Well, I could try. I have -- 18 Okay. 19 MS. YEE: Bring that back to us, but we'll 20 schedule it for the Culver City. 21 MR. LAMBERT: Okay, thank you. 22 ---oOo--- 23 24 25 26 27 28 20 1 REPORTER'S CERTIFICATE. 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 May 26, 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 20 13 pages constitute a complete and accurate transcription 14 of the shorthand writing. 15 16 Dated: June 9, 2010. 17 18 19 ____________________________ 20 BEVERLY D. TOMS 21 Hearing Reporter 22 23 24 25 26 27 28 21