BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT DECEMBER 14, 2010 ITEM H2 TAX PROGRAM NONAPPEARANCE MATTERS - ADJUDICATORY 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 Diane Olson Chief, Board 14 Proceedings Division 15 Board of Equalization Staff: Amy Kelly 16 Appeals Division 17 18 ---oOo--- 19 20 21 22 23 24 25 26 27 28 2 1 INDEX 2 3 Page 4 5 SUB-ITEM 2 6 6 SUB-ITEM 3 7 7 SUB-ITEM 4 9 8 SUB-ITEM 5 10 9 SUB-ITEM 6 13 10 SUB-ITEM 7 14 11 12 ---oOo--- 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 Sacramento, California 2 December 14, 2010 3 ---oOo--- 4 MS. YEE: Next item is H2, Franchise and Income 5 Tax Matters. The first sub-item I believe has been 6 dismissed, Sylvia -- Sylvia Bellew and Philip K. Lee. 7 Is that correct? 8 MS. OLSON: Yes. 9 MS. YEE: Okay. 10 MS. OLSON: Board Proceedings would like to 11 report the submission of a contribution disclosure form 12 by the taxpayer. And this is H2-5, Mr. Christopher J. 13 Hadsell, indicating a disqualifying con -- contribution 14 to Ms. Betty Yee and Mr. John Chiang. 15 Mr. Chiang has returned his contribution 16 disclosure on September 6th. 17 MS. MANDEL: The contribution. 18 MS. OLSON: Contribution, sorry. And Ms. Yee 19 has a statement she would make. 20 MS. YEE: Yes, I -- what's getting circulated 21 now, I have no record of a contribution by the appellant 22 in this matter. And just so there's no question as to 23 my qualification to participate in this matter, there 24 was correspondence sent to Mr. Hadsell overnight, 25 yesterday, from my Treasurer that he should receive 26 today. 27 So I feel I'm clearly qualified to participate 28 in this matter. 4 1 MS. OLSON: And I'm -- I would like to correct 2 my statement. I believe I said September 6th instead of 3 December 6th, that it was returned. 4 MS. YEE: Okay. So, Members, we'll take these 5 up individually, as well? On item H2. 6 MS. MANDEL: Oh, H2. 7 ---oOo--- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 1 SUB-ITEM 2 2 MS. YEE: Okay. So beginning with item H2, 3 Sub-item 2, F. Thomas Eck. Is there a motion? 4 I'll move to sustain the Franchise Tax Board 5 which reflects I think its modified action as to the 6 concession to abate the demand penalty and to reduce the 7 assessment to reflect the income of -- I think it's 8 $822,604. 9 MS. KELLY: That's correct. 10 MS. ALBY: Second. 11 MS. YEE: Okay. Motion by Yee, second by Alby. 12 Without objection? 13 MS. STEEL: Abate the penalty? 14 MS. YEE: Demand penalty yes. 15 MS. STEEL: Okay. 16 MS. YEE: Okay. 17 MS. MANDEL: Wait. Which one? 18 MS. YEE: This is H2, sub-item 2. 19 MS. MANDEL: Okay, that's the recommendation, 20 right? 21 MS. YEE: Yes. 22 MS. KELLY: Yes. 23 MS. YEE: Okay. Without objection, motion 24 carries. 25 ---oOo--- 26 27 28 6 1 SUB-ITEM3 2 MS. YEE: Sub-item 3, Hank Feenstra and 3 Catherine Feenstra. May I have a motion, please? 4 MR. HORTON: Motion to sustain Franchise Tax 5 Board. 6 MS. YEE: Motion by Mr. Horton to sustain the 7 Franchise Tax Board. I will second that motion. 8 Discussion? 9 Objection? Hearing none, that motion carries. 10 Next item is sub-item 4, Wayne J. -- 11 MS. ALBY: Excuse me, I'm sorry, Madam Chair -- 12 MS. YEE: Yes. Yes. 13 MS. ALBY: -- I'm a "no" on that. I'm sorry. 14 MS. YEE: Okay, I'm sorry, let's go back to 15 sub-item 3 then. We will expunge that record without 16 objection. And we have a motion by Mr. Horton, second 17 by Yee to sustain the Franchise Tax Board. Let's call 18 the roll. MS. OLSON: Madam Chair. 19 MS. YEE: Aye. 20 MS. OLSON: Ms. Alby. 21 MS. ALBY: No. 22 MS. OLSON: Ms. Steel. 23 MS. STEEL: Aye. 24 MS. OLSON: Mr. Horton. 25 MR. HORTON: Aye. 26 MS. OLSON: Ms. Mandel. 27 MS. MANDEL: Aye. 28 MS. OLSON: Motion carries. 7 1 MS. YEE: Okay. 2 ---oOo--- 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 1 SUB-ITEM4 2 MS. YEE: Now we're on sub-item 4, Wayne J. 3 Pollard Insurance Agency, Incorporated. May I have a 4 motion? 5 MS. ALBY: Sustain the FTB. 6 MS. YEE: Okay. Motion by Ms. Alby to sustain 7 the Franchise Tax Board. Seconded by Mr. Horton. 8 Without objection, such will be the order. 9 ---oOo--- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 1 SUB-ITEM 5. 2 MS. YEE: Next item is Sub-item 5, Christopher 3 J. Hadsell and Catherine C. Hadsell. 4 May I have a motion? 5 MS. MANDEL: The -- hold on a second. Yeah, 6 the Controller's asked me not to vote on this one today 7 although he did return the contribution. So -- 8 MS. YEE: Do you need more time on this one? 9 You want to put it over? Do you want to put it over, do 10 you want to -- 11 MS. MANDEL: No, he just asked me not to vote 12 on it today, so -- that's just -- 13 MS. YEE: Ms. Olson, was this the matter where 14 we had some public -- was this -- was -- he's going to 15 be here? 16 MS. OLSON: He -- he -- 17 MS. MANDEL: No -- 18 MS. OLSON: -- he had -- he requested Board 19 Proceedings that he had -- he had made arrangements to 20 be here on the 16th for public comment, if possible. 21 Or, excuse me, the 15th. I got my dates mixed up. If 22 it was possible he would like to come tomorrow and speak 23 for three minutes. 24 MS. YEE: Okay. 25 MS. MANDEL: I was just letting you know, I 26 wasn't going to participate in the vote today. 27 MS. YEE: Okay. All right. Wish of the 28 Members? Sub-item 5. 10 1 MS. ALBY: We're going to be stymied, anyway, I 2 think. I would move to grant but I don't think that's 3 going to go anywhere. 4 MS. YEE: Yeah. Give it a try? 5 MR. HORTON: I second that motion. 6 MS. YEE: Okay. A motion by Ms. Alby to grant 7 the -- for appellant. 8 Second by Mr. Horton. 9 Discussion? 10 MS. STEEL: I want to move to grant -- I will 11 move to grant the petition but this is -- this is the 12 case that gave out $250 after the Board hearing was 13 done, right? 14 MS. YEE: The contribution? 15 MS. STEEL: Contributions. 16 MS. YEE: Uh-huh. 17 MS. STEEL: That's not -- really proper -- 18 MS. YEE: It's bad form. 19 MS. ALBY: -- gonna -- 20 MS. STEEL: -- especially as the taxpayer 21 is -- 22 MS. YEE: Although the contributions have been 23 returned and in one case -- 24 MS. STEEL: Right. 25 MS. YEE: -- a contribution was not even 26 received. 27 MS. STEEL: That's -- 28 MS. ALBY: (Inaudible). 11 1 MS. STEEL: Yeah, but that's -- I'll go for it 2 but, you know, still -- you know, I want to state that's 3 not really right move -- 4 MS. YEE: Okay. 5 MS. STEEL: -- to make. 6 MS. YEE: Okay. We already have a motion by 7 Ms. Alby, second by Mr. Horton to grant for the 8 appellant. Let me just say for the record, I thought 9 there still remain a lot of gaps in this case with 10 respect to the appellant substantiating his time and 11 whereabouts and it seemed like the simplest of 12 documentation that could have been provided was lacking. 13 And I think at the oral hearing we were very generous 14 about suggesting the types of things that we'd like to 15 see to substantiate his -- his time and where he was. 16 Please call the roll. 17 MS. OLSON: Madam Chair. 18 MS. YEE: No. 19 MS. OLSON: Ms. Alby. 20 MS. ALBY: Aye. 21 MS. OLSON: Ms. Steel. 22 MS. STEEL: Aye. 23 MS. OLSON: Mr. Horton. 24 MR. HORTON: Aye. 25 MS. OLSON: Ms. Mandel. 26 MS. MANDEL: I'm not voting today. Thank you. 27 MS. OLSON: Motion carries. 28 ---oOo--- 12 1 SUB-ITEM 6 2 MS. YEE: Okay. Next item is Sub-item 6, 3 Brent C. Welling and Viki Lee Welling. Is there a 4 motion? 5 I'm going to move to sustain the Franchise Tax 6 Board. Is there a second? 7 MR. HORTON: Second. 8 MS. YEE: Second by Mr. Horton. 9 Discussion? 10 MS. STEEL: Objection. 11 MS. YEE: Okay. Discussion? Okay. 12 MS. STEEL: No discussion, just (inaudible.) 13 MS. YEE: All right, please call the roll. 14 MS. OLSON: Madam Chair. 15 MS. YEE: Aye. 16 MS. OLSON: Ms. Alby. 17 MS. ALBY: No. 18 MS. OLSON: Ms. Steel. 19 MS. STEEL: No. 20 MS. OLSON: Mr. Horton. 21 MR. HORTON: Aye. 22 MS. OLSON: Ms. Mandel. 23 MS. MANDEL: Aye. 24 MS. OLSON: Motion carries. 25 MS. YEE: Okay. 26 ---oOo--- 27 28 13 1 SUB-ITEM 7. 2 MS. YEE: And our last sub-item in this item, 3 Sub-item 7, Frank J. Vigil. 4 May I have a motion, please. 5 MR. HORTON: Move to sustain the Franchise Tax 6 Board. 7 MS. YEE: Motion by Mr. Horton to sustain the 8 Franchise Tax Board. 9 The Chair will second that motion. 10 Discussion? 11 MS. STEEL: No discussion, just objection. 12 MS. YEE: Okay, please call the roll. 13 MS. OLSON: Madam Chair. 14 MS. YEE: Aye. 15 MS. OLSON: Ms. Alby. 16 MS. ALBY: No. 17 MS. OLSON: Ms. Steel. 18 MS. STEEL: No. 19 MS. OLSON: Mr. Horton. 20 MR. HORTON: Aye. 21 MS. OLSON: Ms. Mandel. 22 MS. MANDEL: Aye. 23 MS. OLSON: Motion carries. 24 MS. YEE: Okay. 25 ---oOo--- 26 27 28 14 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 December 14, 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 14 13 pages constitute a complete and accurate transcription 14 of the shorthand writing. 15 16 Dated: August 2, 2010. 17 18 19 20 ____________________________ 21 BEVERLY D. TOMS 22 Hearing Reporter 23 24 25 26 27 28 15