BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT APRIL 26, 2011 ITEM J1 CHIEF COUNSEL MATTERS RULEMAKING 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 Board of Equalization 15 Staff: Carole Ruwart Legal Department 16 Bradley Heller 17 Legal Department 18 19 --oOo--- 20 21 22 23 24 25 26 27 28 2 1 Sacramento, California 2 April 26, 2011 3 ---oOO--- 4 MS. OLSON: Our next item is J1, Petition to 5 amend Property Tax Rule 462.060, Change in Ownership - 6 Life Estates and Estates for Years; Property Tax Rule 7 462.100, Change in Life Ownership - Leases; Property Tax 8 Rule 462.160, Change in Ownership - Trusts; Property Tax 9 Rule 462.180, Change in Ownership - Legal Entities and 10 Property Tax Rule 462.260, Date of Change in 11 Ownership. 12 We have two speakers for this matter. 13 MR. HORTON: Thank you. 14 Members, before us is Mr. -- Mr. Douglas 15 Wacker. He is the President of the California Assessors 16 Association. Also the Assessor and Recorder in Lake, 17 California. As well as Barbara Edginton, the Assessment 18 Manager of the California Assessors Association, as 19 well. 20 Please commence with your -- 21 MR. WACKER: Okay. 22 MR. HORTON: -- presentation. 23 MR. WACKER: Good afternoon, Board Chairman 24 Horton and fellow Board Members. 25 Barbara Edginton, Assessment Manager, and I are 26 here on behalf of the California Assessors Association 27 to oppose Mr. Bennett's Petition on Rule 462.260 and 28 support staff's recommendation that you will deny Mr. 3 1 Bennett's petition to amend Rule 462.260. 2 I would like to emphasize two points. First, 3 Proposition was passed more than 30 years ago and there 4 have been many cases heard in the Superior Courts, 5 Appeal Court, the State Supreme Court as well as a case 6 heard in the United States Supreme Court. 7 This includes the Phelps case which 8 specifically addresses the question of a trust created 9 in 1947, well before part .5 was created and 10 reassessment of remainder interests following the death 11 of a life estate holder. 12 And, two, many Courts do however emphasize that 13 one cannot state as fact something that is not existent 14 in law. Had the Legislator intended to limit the 15 application of the change in ownership laws it would 16 have included that language in the statutes and 17 regulation. 18 In 1979 there was no thought that the new laws 19 would not apply to something created prior to July 1979, 20 or certainly it would have so stated. 21 Since that time this would have severely 22 limited the number of reassessments. 23 In closing, adding Mr. Bennett's proposed 24 language under Rule 462.260 is unnecessary, it would 25 cause confusion and misunderstanding and interpretation 26 by assessment staff attorneys and property owners. And 27 it would potentially open the door to future changes we 28 believe were not the intended -- were not intended by 4 1 the original drafters of the regulation. 2 Therefore, we firmly oppose -- are opposed to 3 Mr. Bennett's petition. 4 MR. HORTON: Thank you very much. Does that 5 conclude your presentation? Thank you so -- 6 MR. WACKER: Yeah. 7 MR. HORTON: -- very much. 8 I would ask that the Department make their 9 presentation, as well, and introduce the matter, at the 10 same time take in consideration the presentation today. 11 If you could address that in any way in your 12 presentation it might be helpful. Thank you. 13 MS. RUWART: Good afternoon, Board Members. 14 My name is Carole Ruwart. I'm an attorney with the 15 Legal Department. And here with me is Bradley Heller, 16 also with the Legal Department. 17 Mr. Bennett did petition to amend a number of 18 Property Tax Rules as stated by Ms. Olson and -- and 19 April 21st he withdrew all of his petitions to amend the 20 rules except for his amendment to Rule 462.260. 21 His revised petition, both original and as 22 amended, is seeking essentially the same result as his 23 petition that he put before the Board on the Jan -- at 24 the January 27th meeting which the Board denied. 25 We firmly agree with Mr. Wacker's comments. 26 And for reasons and all the reasons set forth in the 27 Chief Counsel memorandum we believe that the requested 28 amendments and Petitioner's arguments in general are 5 1 directly contrary to relevant legal authority, our State 2 Supreme Court and the Court of Appeals in the Phelps 3 decision. And we recommend that the petition be denied. 4 MR. HORTON: Thank you very much. 5 Discussion, Members? 6 Hearing none, is there a motion? 7 MS. YEE: Move to adopt the staff 8 recommendation. 9 MR. HORTON: It's been moved by Ms. Yee to 10 adopt the staff recommendations. 11 Is there a second? 12 MS. MANDEL: Second. 13 MR. HORTON: Second by Ms. Mandel. 14 Discussion, Members? 15 Without objection, such will be the order. 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 6 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 April 26, 2011 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 6 pages 13 constitute a complete and accurate transcription of the 14 shorthand writing. 15 16 Dated: May 13, 2011. 17 18 19 ____________________________ 20 BEVERLY D. TOMS 21 Hearing Reporter 22 23 24 25 26 27 28 7