BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT FEBRUARY 22, 2011 ITEM H2 TAX PROGRAM NONAPPEARANCE MATTERS ADJUDICATORY FRANCHISE AND INCOME TAX MATTERS Reported by: Beverly D. Toms No. CSR 1662 1 1 2 P R E S E N T 3 4 For the Board Jerome E. Horton of Equalization: Chairman 5 Michelle Steel 6 Vice-Chairwoman 7 Betty T. Yee Member 8 George Runner 9 Member 10 Marcy Jo Mandel Appearing for John Chiang 11 State Controller (per Government Code 12 Section 7.9) 13 Diane Olson, Chief Board Proceedings Division 14 15 16 --oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 2 1 2 INDEX 3 4 ITEM H2 PAGE 5 SUB-ITEM 1 4 6 SUB-ITEM 2a, 2b and 2c 5 7 SUB-ITEM 3 7 8 ---oOo--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 SUB-ITEM 1 2 Sacramento, California 3 February 22, 2011 4 ---oOO--- 5 MS. OLSON: Our next item is H2, Franchise and 6 Income Tax Matters, Adjudicatory. 7 The first item is H2.1, Adele J. Fasano. 8 MR. HORTON: Okay. Discussion, Members? 9 Okay. Is there a motion, Members? 10 MS. YEE: Move the staff recommendation. 11 MR. HORTON: It's been moved by Ms. Yee, second 12 by -- 13 MS. STEEL: Second 14 MR. HORTON: -- Ms. Steel. 15 Without objection, such will be the order. 16 Members, we will note the non-participation -- 17 MS. MANDEL: Oh, not on this one. This one's 18 fine. 19 MR. HORTON: Oh, this one's yours? Okay. 20 MS. MANDEL: Yeah. 21 MR. HORTON: Ms. Olson, next item, please. 22 ---oOo--- 23 24 25 26 27 28 4 1 SUB-ITEM 2a, 2b AND 2c, PART 2. 2 MS. OLSON: Our next item is H2.2a, Felix Lin 3 and Betty Lin; H2.2b, Linus Upson; and H2.2c, Rafael 4 Weinstein. 5 MR. HORTON: Okay. 6 Discussion, Members? 7 MS. STEEL: I move to grant. 8 MR. RUNNER: Second. 9 MR. HORTON: There's a motion to grant by Ms. 10 Steel, second by Mr. Runner. 11 Discussion, Members? 12 After careful consideration, my concern, 13 Members is, is that a contractual obligation did exist 14 with the employees, that they would actually be 15 compensated based on the years of service directly 16 correlated to their employment which gives me some 17 pause. And certainly I wish it was another way and 18 especially given the innate desire of the taxpayer to 19 provide an economic stimules -- stimuli to the State of 20 California. 21 Ms. Olson, please call the roll. 22 MS. OLSON: Mr. Horton. 23 MR. HORTON: No. 24 MS. OLSON: Ms. -- 25 MR. HORTON: Oh -- yeah, no. No. 26 MS. OLSON: Ms. Steel. 27 MS. STEEL: Aye 28 MS. OLSON: Mr. Runner. 5 1 MR. RUNNER: Aye. 2 MS. OLSON: Motion carries. 3 ---oOo--- 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 6 1 SUB-ITEM3 2 MS. OLSON: Our next item is H2.3, Ronald N. 3 Frazar and Jane A. Frazar. 4 MR. HORTON: Discussion, Members? 5 MS. STEEL: Just a little question, that the 6 taxpayer's representative brought up some different law 7 that we didn't -- I -- I didn't look at from this case. 8 So, is that the new law that she brought it up so we 9 can -- 10 MR. AMBROSE: I -- I think that that came up in 11 the course of the hearing. I -- 12 MS. STEEL: Was it? 13 MR. AMBROSE: Yeah. 14 MS. STEEL: Because -- 15 MR. AMBROSE: I mean, I -- I wrote the petition 16 for rehearing or the decision, and I couldn't, you know, 17 determine that any of what she brought up hadn't been 18 brought up in the hearing. So that's why we determined 19 that, you know, the Board had fully -- you know, all the 20 issues in -- in the law had been fully considered and 21 didn't really see that, you know, the Board had erred in 22 any way. 23 MS. YEE: Okay. 24 MS. MANDEL: Mr. -- hello. 25 MR. HORTON: Any further discussion, Members? 26 MS. MANDEL: Yeah, I mean I'd -- I'd be willing 27 to hear it again on the substantive issue. There was a 28 lot of -- I mean, I don't know that the answer -- this 7 1 was a -- you know, a long hearing and all of that, but 2 it wasn't sort of completely uncontested. So I just -- 3 we'd -- we'd be willing to rehear the substantive issue 4 just to make sure, but -- how we feel. But -- 5 MR. HORTON: Okay. 6 MS. MANDEL: -- I -- I don't know what other 7 people -- 8 MR. HORTON: Members, is that a -- any 9 discussion Members? 10 MS. STEEL: Second. 11 MR. HORTON: Further discussion? 12 MR. RUNNER: The -- the motion before us is 13 to -- 14 MS. STEEL: Give her rehearing. 15 MR. HORTON: Ms. Mandel. 16 MS. MANDEL: Well, I would -- 17 MR. HORTON: Grant. 18 MS. MANDEL: -- move to -- yeah, grant the 19 petition for rehearing on the substantive issue. 20 MR. HORTON: It's been moved to grant a 21 rehearing on the substantive issues. 22 Is there a second? 23 MS. STEEL: Second. 24 MR. HORTON: Second by Ms. Steel. 25 Without objections, Members, such will be the 26 order. 27 ---oOo--- 28 8 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 February 22, 2011 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 8 pages 13 constitute a complete and accurate transcription of the 14 shorthand writing. 15 16 Dated: March 3, 2011. 17 18 19 ____________________________ 20 BEVERLY D. TOMS 21 Hearing Reporter 22 23 24 25 26 27 28 9