1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JULY 26, 2011 9 PUBLIC SPEAKER 10 WILLIAM CONNELL 11 12 13 14 15 16 17 18 19 20 Reported by: Juli Price Jackson 21 No. CSR 5214 22 23 24 25 26 27 28 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per 13 Government Code Section 7.9) 14 15 Diane G. Olson Chief, Board 16 Proceedings Division 17 18 For the Department: Randy Ferris Legal Department 19 20 21 Speaker: William Connell 22 ---oOo--- 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JULY 26, 2011 4 ---oOo--- 5 MR. HORTON: Members, next we have Mr. Connell. 6 Welcome, sir. 7 ---o0o--- 8 WILLIAM CONNELL 9 ---o0o--- 10 MR. CONNELL: Good morning. I'm here to speak 11 on the veterans' tax exemption statute that you guys 12 have worked very, very hard on. I wanted to thank you 13 very much. 14 One in four veterans in my county are homeless. 15 One in four of the homeless population in my county are 16 veterans. Unemployment rate is 27 percent of returning 17 veterans at this point -- just made national news. 18 The bill that's being -- I think it's on its 19 way to the Governor's office to take the sunset clause 20 out of the veterans bill. I think that's on its way. 21 In 2008 I was here and I wanted to petition to 22 adopt the regulation. I didn't think you needed the 23 legislation, I already thought you had the power. I 24 already thought you had it in law. 25 It was held off until we heard from our 26 Attorney General. And our Attorney General was openly 27 deceitful in handing an opinion back to you by 28 misrepresenting a lot of the facts. 3 1 MR. HORTON: Mr. Connell, I would encourage the 2 framing of the word "deceitful," but leave it up to you 3 and -- 4 MR. CONNELL: I'm trying -- 5 MR. HORTON: -- certainly want to -- 6 MR. CONNELL: -- I'm trying to be kind. 7 MR. HORTON: -- I certainly, at a minimum, want 8 to distinguish, if you will, are you speaking of the 9 current Attorney General or the previous Attorney 10 General? 11 MR. CONNELL: I was speaking of the Governor. 12 MR. HORTON: Who is now the Governor? 13 MR. CONNELL: Who hasn't signed the bill. 14 MR. HORTON: Who most likely will sign the 15 bill. 16 MR. CONNELL: I'm certain he's never even seen 17 the paperwork that was put forth. I'm certain of it, 18 okay. 19 I believe there might some attorneys that are 20 trying to save some face in regards to this, plain and 21 simple. That's my own feeling and everybody else can 22 understand that. 23 You guys have always had the power to put a 24 regulation for us, for our veterans. You've always had 25 it. You've had it since 18 -- 1872 and 1893. 26 When Ms. Yee and when then Mr. Leonard asked 27 specifically for specific dates and for specific 28 background and for specific information, what was 4 1 returned -- I can't describe it. 2 I have given Miss Betty Yee a full list of what 3 was excluded. The Assembly bills I've both defeated 4 that were going to remove the different commas in 5 question. It removed the word "State" that was in 6 question. I defeated those Assembly bills. They 7 weren't mentioned. That's part of the legislative 8 history. 9 I believe that at this point my petition could 10 be completely re -- rebrought (verbatim) before the 11 Board. I will bring it right up. 12 This way myself, and all of the veterans who 13 are waiting for the tax money that they didn't have to 14 pay, could get their monies back. 15 MS. OLSON: Time has expired. 16 MR. CONNELL: I appreciate your time. 17 MR. HORTON: You know, one second -- 18 MR. CONNELL: I appreciate -- 19 MR. HORTON: I interrupted -- I mean I 20 interrupted Mr. Connell. 21 I'm going to give you another minute to close 22 out, if you will. 23 MR. CONNELL: Look, I think you guys work as 24 hard as anybody in this whole state. And you don't get 25 enough credit. You always get smacked around a lot. 26 I think that you're only as good as the people 27 that you depend upon. In my case here, in this hearing 28 on 2008, I reluctantly agreed to let a lawyer -- let a 5 1 lawyer look at this and let's see -- let's see what's 2 what. 3 That was a terrible mistake. I know what I 4 know, okay. He didn't give you the right information. 5 He didn't give the Chair the information she wanted or 6 Mr. Bill Leonard. 7 I haven't gone and told Mr. Leonard what was in 8 that yet, I don't want to do that, I'll give him a heart 9 attack. 10 Let's take care of all of the veterans as 11 quickly as we possibly can. Let's reinstate this 12 rulemaking process from 2008 that I put forth. Simple. 13 And if you need anything else from me, I 14 appreciate all the time that you've given me over the 15 years -- and now it's at 20 years I've been working on 16 this. 17 So, I want to -- God bless all of you, you are 18 working with big potatoes just a little while ago. This 19 is very small potatoes, we're small, tiny little veteran 20 vendors. This isn't a big amount of money, but it -- it 21 has a real lot to do with their quality of life. 22 So, I appreciate all the time. Thank you so 23 very much. 24 I'm going to go have a cold beer because it's 25 hot outside. 26 MR. HORTON: Thank you very much, sir. 27 MR. CONNELL: Thank you. 28 MR. HORTON: Any input, Members? 6 1 MR. RUNNER: Just a quick question -- 2 MR. HORTON: Mr. Runner? 3 MR. RUNNER: -- to counsel -- and, again, I 4 haven't been a part of this discussion, don't know it's 5 history. 6 MR. HORTON: Mr. Connell -- one second, 7 Mr. Runner -- you're welcome to stay, but I would ask 8 that you have a seat. 9 Thank you, sir. 10 MR. RUNNER: Help me understanding -- I'm not 11 sure exactly what the process has been in the past, how 12 this was deliberated and what the options are in the 13 future. 14 So, maybe, Counsel -- I mean, it sounded to me 15 that -- that the -- one of the issues the taxpayer was 16 asking for is for this to somehow find its way back for 17 a new discussion here to the Board. 18 What are -- what are the options? I just don't 19 know what the path and the options are. 20 MR. FERRIS: And I appreciate Mr. Connell's 21 point of view and his courage in pursuing his 22 convictions over all these years. 23 From staff's point of view, if the sunset 24 provision is extended -- and we anticipate that it will 25 be -- we don't see any active need for any kind of 26 rulemaking because the statute itself creates 27 an effective solution to the problem. 28 It's not necessarily the solution that 7 1 Mr. Connell's been seeking, but it's -- it effectively 2 gets us to the same place, which is that veteran vendors 3 like him could operate without needing to be permitized 4 by the Board of Equalization and, therefore, not have 5 any tax obligations with us. 6 MR. RUNNER: Okay. And again I'm trying to -- 7 the specific question I was asking, and that is, if he's 8 not satisfied at that point again, what would be his 9 path for us to hear and deal with this issue? 10 MR. FERRIS: He could submit in writing a 11 formal rulemaking petition and then the Board would be 12 obligated under law to respond. 13 And they would, I guess, decide if they share 14 staff's view that the statute itself creates the 15 effective solution. 16 MR. RUNNER: Okay. Thank you on that, I just 17 want to kind of know what options were at that point. 18 MR. HORTON: Mr. Runner, if I -- I'm going to 19 -- Ms. Yee, who is very much with this -- 20 MR. RUNNER: Yes. 21 MR. HORTON: -- I want to sort of frame this 22 up, if you will, the challenge that we face is the 23 legislation that was passed is prospective. 24 MS. YEE: Right. 25 MR. HORTON: Had that legislation been 26 grandfathered in, then it would have given us purview 27 over the issue that Mr. Connell is concerned about, 28 which is historical. 8 1 And then you have the concerns about whether or 2 not the settlement agreement is germane to every account 3 and was conclusive in and of itself. 4 So, which I believe -- I'm certainly supportive 5 of. I think I've heard the Board, when I was in the 6 legislature, that all of the Board Members at that time 7 were supportive of grandfathering this clause in, it's a 8 -- it's a worthy issue. 9 And, so, I think that's the challenge that we 10 face. We can certainly take it up in the rulemaking 11 process. But can we effect the change? 12 We can't. That's up to the legislative body in 13 order to do that. 14 And I'm certainly willing to do whatever we can 15 to make that happen. 16 Member Yee? 17 MS. YEE: No, I was just going to clarify, 18 thank you, Mr. Chairman, that there -- that the 19 legislation really did address the issue prospectively. 20 And what Mr. Connell is seeking -- on behalf of 21 the veterans' community -- is a refund of all the sales 22 taxes that were paid before the enactment of that law. 23 And I think our remedies for that are limited 24 and close to none without the statutory authority to 25 essentially apply what has been enacted retroactively. 26 MR. RUNNER: Okay, thank you. 27 MR. HORTON: Thank you very much, Mr. Connell. 28 MR. CONNELL: Thank you for your advice. 9 1 Maybe I -- maybe I misspoke in regards to the 2 intentionally deceitful, maybe they just didn't 3 understand what the questions were. 4 So, I'd like to change -- change that. And I 5 appreciate your guidance. 6 Thank you. 7 MR. HORTON: Thank you as well. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 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 JULY 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 pages 1 13 through 10 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: August 18, 2011 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 11