1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 AUGUST 24, 2010 9 PUBLIC HEARING 10 F1 11 Proposed Repeal of Property Tax Rule 471 12 Timberland 13 Proposed Amendments of Property Tax Rule 1020 14 Timber Value Areas 15 16 17 18 19 20 21 22 23 24 25 26 Reported by: Juli Price Jackson 27 No. CSR 5214 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 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 CULVER CITY, CALIFORNIA 3 AUGUST 24, 2010 4 ---oOo--- 5 MS. YEE: We have a -- 6 MS. OLSON: Public hearing. 7 MS. YEE: -- let's take up F1. 8 MS. OLSON: Our next item is F1, proposed 9 repeal of Property Tax Rule 471, Timerland, and the 10 proposed amendments of Property Tax Rule 1020, Timber 11 Value areas. 12 MS. YEE: Okay. Good afternoon, Mr. Heller. 13 MR. HELLER: Good afternoon, Madam Chair, 14 Members of the Board. 15 Again I'm Bradley Heller with the Board's Legal 16 Department. And I am here to request that the Board 17 adopt the repeal of Property Tax Rule 471, timberland 18 and the proposed amendments to Property Tax Rule 1020, 19 timber value areas. 20 Real briefly, staff is recommending a repeal of 21 the regulation -- excuse me, Property Tax Rule 471 22 because it's redundant and it basically just mimics 23 statutory provisions that have been in the place for 24 more than two decades. 25 And, essentially, staff doesn't believe there 26 is any controversy at all regarding the assessment of 27 timberland and doesn't believe there is any necessity 28 for the regulation. 3 1 In addition, staff is proposing amendments to 2 Property Tax Rule 1020 because the regulation has not 3 been updated since 1977 and there has substantial 4 changes to the marketing conditions for timber in the 5 State of California. 6 And we're recommending amendments that would 7 just move certain counties into different tax value 8 areas so that they will basically -- each tax value area 9 would have -- includes similar counties with the same or 10 similar growing, harvesting and marketing conditions. 11 Real briefly as well, we've received one public 12 comment in support of the amendments to Rule 1020. And 13 just this afternoon, we received a written comment from 14 a person named N. D. Fenton, who sent their comment via 15 e-mail. And, basically, staff's only response is to 16 say, "We don't really think this particular person quite 17 understood what the proposals were or what their effects 18 were." 19 And, essentially, in this particular case, the 20 lead comment seems to be that the repeal of Section -- 21 or Property Tax Rule 471 would repeal the definition for 22 timberland and, therefore, essentially delete all 23 definitions for timberland from the property tax law. 24 That's definitely not the case. And, as I said 25 before, the regulation is duplicative of statutory 26 provisions and timberland is defined in Revenue and 27 Taxation Code Section 431. 28 And we don't believe that the repeal of the 4 1 regulation would have have any effect -- any legal 2 effect at all, much less eliminating the entire 3 definition for timberland. 4 Again, the next comment deals with the fact 5 there's no necessity or purpose or reasons for this 6 action. We do think that there is necessity. In fact, 7 this is just basically a duplicative regulation. 8 Another example is that the commenter says that 9 the Board lacks authority to repeal legislation. As you 10 know, we're just basically repealing a regulation, not a 11 statute. 12 So, the Board certainly has authority to do 13 that. 14 Moving on, the commenter also makes a number of 15 other comments regarding regulation 1020 that are, 16 essentially, confusing and making me think that the 17 person who commented thinks that by moving counties from 18 one tax timber value area to another somehow affects 19 whether or not they would be subject to property tax or 20 whether or not the timber yield tax would apply at all. 21 And that's just incorrect. It basically 22 just -- when you -- a timber value area -- a timber 23 value area, basically, just like I said, it just 24 contains areas with similar growing, harvesting and 25 marketing conditions. 26 And then, as the Board's aware, the Board 27 separately establishes values for timber in each of 28 those areas and then also establishes the tax rate. 5 1 So, this doesn't directly affect the taxation 2 of any timber or the application of the timber yield tax 3 directly. Therefore, the staff doesn't recommend any 4 changes to the proposal and requests that the Board 5 adopt the repeal of Rule 471 and the amendments to 6 Rule 1020 today. 7 And I'd also just add that staff's trying to 8 complete the amendments to Rule 1020 in time for the 9 Board to adopt the new value schedules in November for 10 the tax value areas. 11 So, we want to have the new value areas 12 established in time to create schedules based on those. 13 MS. YEE: Thank you. 14 MR. HELLER: If there's any additional 15 questions, we can answer those. 16 MS. YEE: Thank you, Mr. Heller. 17 Questions, Members? 18 Hearing none, may I have a motion, please? 19 MS. STEEL: So moved. 20 MS. YEE: Motion by Ms. Steel. 21 May I have a second? 22 MS. ALBY: Second. 23 MS. YEE: Second by Ms. Alby. 24 Without objection, that motion carries. 25 Thank you very much. 26 MR. HELLER: Thank you. 27 ---o0o--- 28 6 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 AUGUST 24, 2010 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 6 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: September 1, 2010 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 7