BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT MAY 26, 2010 PROPERTY TAX COMMITTEE Reported by: Beverly D. Toms No. CSR 1662 1 1 2 P R E S E N T 3 4 For the Committee: Michelle Steel Chair 5 Jerome E. Horton 6 Vice-Chair 7 Barbara Alby Acting Member 8 Betty T. Yee 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: Dean Kinnee 17 Lisa Thompson 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 SUB-ITEM 1 2 Sacramento, California 3 May 26, 2010 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 this committee. Ms. Steel. 8 MR. HORTON: Wow. 9 MS. YEE: No, we can go on. Well, actually 10 Department want a break? 11 MR. HORTON: Yeah, yeah, yeah. 12 MS. YEE: Let's do five minutes. 13 MS. STEEL: Yeah. 14 MS. YEE: Yeah. 15 MS. STEEL: I think we're going to take five 16 minutes break. 17 MS. YEE: We're going to take a five minutes 18 recess. 19 MS. STEEL: Yeah. Okay. 20 MS. YEE: Okay? 21 MS. STEEL: Yeah. 22 (Recess) 23 MS. YEE: I'll call the Property tax Meeting to 24 order. 25 MS. STEEL: And we have two agenda -- two items 26 before us today. And first one, adoption of guidelines 27 for sub -- substantiating -- I'm having a hard time 28 today -- of self -- you know what, Dean Kinnee is going 3 1 to report to us. 2 MR. KINNEE: Thank you. I was hoping you'd 3 handle that -- 4 MS. STEEL: Yes. 5 MR. KINNEE: -- for us. The first item before 6 the -- 7 MS. STEEL: I had a long morning already, so -- 8 MR. KINNEE: The first item before the 9 Committee is guidelines for substantiating additional 10 obsolescence for personal property and fixtures. 11 As you're aware, the Board annually publishes 12 Assessor's Handbook Section 581, Equipment Index -- 13 Equipment and Fixtures Index for percent good and 14 valuation factors to assist Assessors in the mass 15 appraisal of business property. 16 While these factors developed take into account 17 ordinary obsolescence, they do not account for 18 additional extraordinary obsolescence that may exist and 19 needs to be accounted for in determining a property's 20 market value. 21 In recent years staff's received numerous calls 22 from Assessors' staff as well as taxpayers seeking 23 guidance on how they might measure an account for such 24 obsolescence. Staff developed these guidelines to 25 address those questions we received. We've worked the 26 guidelines through the interested parties process. At 27 this time we're not aware of any outstanding issues. 28 And we ask that the committee adopt the guidelines. 4 1 And I'm happy to answer any questions the 2 Committee may have. 3 MS. STEEL: Thank you, Dean. We don't have any 4 speakers today, so any comments, Members? 5 Okay. Is there a motion? 6 MR. HORTON: So moved, Madam Chair. 7 MS. YEE: I'll second. 8 MS. STEEL: Thank you. So, Member Horton 9 making the motion to adopt the guidelines. And Member 10 Yee making the second, the motion is adopted. 11 ---oOo--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 1 SUB-ITEM 2. 2 MS. STEEL: We have second item on our agenda, 3 and Dean Kinnee. 4 MR. KINNEE: The second item, we're asking the 5 Committee to authorize publication of amendments to 6 Property Tax Rule 1020, Timber Value Areas, and 7 authorize the repeal of Property Tax Rule 471, 8 Timberland. 9 As part of the Timber Yield Tax Program 10 administered by the Board, the Board is required to 11 establish timber value areas throughout the State based 12 on areas containing timber having similar growing, 13 harvesting and marketing conditions. 14 Rule 1020 was adopted in 1976 to establish 15 these areas. While similar growing and harvesting 16 conditions have not significantly changed since Rule 17 1020 was amended, marketing conditions have changed due 18 to closure of a large number of timber mills and 19 processing facilities throughout California. 20 These closures have made it necessary for 21 timber products to be shipped further distances for 22 processing which adds to the cost of marketing the 23 product. 24 The proposed changes to Rule 1020 will better 25 align timber areas within California to reflect these 26 amended marketing costs. 27 As for Rule 471, it's an obsolete regulation 28 that staff's just asking to be repealed. We've worked 6 1 these rules through the interested parties process. 2 They've twice been discussed at the Timber Advisory 3 Committee. The Committee is in support of the proposed 4 amendments. At this time I'll be happy to ask any 5 ques -- answer any questions. 6 MS. STEEL: Any comments or questions, Members? 7 MS. YEE: I'm glad to see San Francisco finally 8 stricken from the list of (inaudible). 9 I want to move to adopt the staff -- the 10 recommendation -- or request authorization, excuse me. 11 MR. HORTON: Second. 12 MS. STEEL: Second. 13 MS. ALBY: Second. 14 MS. STEEL: Okay. So, Member Yee making the 15 motion and Member Horton making the second; motion's 16 been adopted. 17 And this concludes our business of the Property 18 Tax Committee. Thank you. 19 MR. KINNEE: Thank you. 20 ---oOo--- 21 22 23 24 25 26 27 28 7 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 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 7 pages 13 constitute a complete and accurate transcription of the 14 shorthand writing. 15 16 Dated: June 11, 2010. 17 18 19 ____________________________ 20 BEVERLY D. TOMS 21 Hearing Reporter 22 23 24 25 26 27 28 8