1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 SEPTEMBER 20, 2011 10 11 12 13 14 15 ITEM L1 16 WELFARE EXEMPTION FOR NONPROFITS 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 Michelle Steel 5 Vice-Chairwoman 6 Betty T. Yee Member 7 George Runner 8 Member 9 Marcy Jo Mandel Appearing for John 10 Chiang, State Controller (per Government Code 11 Section 7.9) 12 Diane G. Olson Chief 13 Board Proceedings Division 14 For Board of Richard Moon Equalization Staff: Legal Department 15 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 2 1 INDEX OF SPEAKERS 2 ---oOo--- 3 NAME PAGE 4 Gregory Broege 6 Ajalat, Polley, Ayoob & Matarese 5 6 ---oOo--- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 SEPTEMBER 20, 2011 4 ---oOo--- 5 MS. OLSON: Our next item is L1, Welfare 6 Exemption for Nonprofits. 7 And we do have one speaker, Mr. Horton. 8 MR. HORTON: Okay. 9 Members, Mr. Moon will present on this, and 10 then we'll hear from the speaker. 11 I would ask that the speaker, uh, Gregory -- 12 MR. BROEGE: Broege. 13 MR. HORTON: -- Broege, because it's an "O", 14 please come forward. 15 Mr. Moon, please commence with your 16 presentation. Welcome, by the way. 17 MR. MOON: Thank you. 18 Good afternoon, Chairman Horton, Members of the 19 Board. My name's Richard Moon with the Legal 20 Department. 21 Uh, Member Yee, last month, initiated this 22 request for this Chief Counsel item, to discuss the 23 consistency of staff's administration of -- of the 24 Welfare Exemption for nonprofits that perform charitable 25 activities in a global manner. 26 Um, as well as you know, there is some interest 27 generated in this topic by a recent New York Times 28 article that was published, that discussed California 4 1 nonprofits. And it cited a California attorney who 2 asserted that one of his clients had been denied an 3 Organizational Clearance Certificate because that client 4 had a mission that was global in its outlook. 5 And just to clarify for the record, um, as far 6 as we can tell, that organization has not been denied an 7 OCC. Instead, it's been referred to the Legal 8 Department by the County-Assessed Properties Division. 9 We've provided the Board Members materials that 10 are linked to the Public Agenda Notice that discusses 11 this issue, the issue of how much benefit California 12 must receive for a nonprofit to qualify for an 13 Organizational Clearance Certificate. 14 This test is known as the Community Benefit 15 Test, and it requires that charitable activities benefit 16 the community as a whole or an unascertainable and 17 indefinite portion thereof. And historically, staff has 18 interpreted this to mean that the charitable activities 19 must primarily benefit the California community. 20 In 2010, the Legal Department drafted a memo to 21 clarify that what's required is not an objective 22 quantification of benefit, but rather, that some prime 23 or first rank or meaningful benefit must accrue to the 24 California community. Uh, and so all pending and 25 future, uh, claims for an Organizational Clearance 26 Certificate would be analyzed on that basis, um, and any 27 other direction or guidance that the Board would give. 28 Thank you. 5 1 MR. HORTON: Thank you very much, Mr. Moon. 2 Please commence with your presentation today. 3 ---oOo--- 4 GREGORY BROEGE 5 ---oOo--- 6 MR. BROEGE: Hi. My name is Gregory Broege of 7 Ajalat, Polley, Ayoob & Matarese. 8 MR. HORTON: Welcome. 9 MR. BROEGE: Thank you. Thank you very much, 10 uh, Chairman, and the Board Members, for letting me 11 speak. 12 Um, usually I think we'd start off with whether 13 we agree or disagree. It's kind of tough because we 14 have some maybe minor disagreements, but I want to focus 15 on one issue that, um, my law firm in general thinks is 16 important. 17 Um, right now, um, the Community Benefits Test 18 is applied at the OCC level. You need an Organizational 19 Clearance Certificate in order to get the Welfare 20 Exemption. We think it's -- it would be more properly 21 applied down at the property level. And, uh, to 22 illustrate that statement, I'll give an example of how 23 applying it at the OCC could maybe go contrary to the 24 intent of the Welfare Exemption. 25 Uh, imagine a nonprofit corporation that runs 26 homeless shelters in California. Um, its -- its single, 27 uh, member is another nonprofit corporation, 501(c)(3) 28 exempt, someone who would get the Welfare Exemption that 6 1 runs, uh -- well, homeless shelters in Nevada. It runs 2 two homeless shelters in Nevada. 3 Um, in the dissolution clause of the Articles 4 of Incorporation, the, um -- the California, uh, 5 Nonprofit, uh, Articles of Incorporation shows that if 6 it dissolves, the properties would go to the, uh, Nevada 7 corporation. 8 Well, right there, these homeless shelters in 9 California wouldn't be able to qualify for the Welfare 10 Exemption, and the reason would be is because the 11 dissolution clause going to the Nevada corporation 12 would, uh, not, uh, fulfill Rules 143 and twenty -- and 13 Statute 214 -- it's either point six or subsection six. 14 I'm sorry, I can't remember off the top of my head. 15 Uh, and the reason being is that the Nevada 16 corporation, uh, doesn't qualify for an OCC with the 17 Community Benefits Test being applied at the OCC level 18 because it doesn't benefit California, arguably, at all. 19 It runs homeless shelters in Nevada. And I can even 20 change it to Florida to put it further away, uh, 21 distance-wise. 22 However, if the corporation that's in 23 California did dissolve and the properties, uh, were 24 transferred to the Nevada corporation, it would then 25 automatically, you'd think, be able to qualify for the 26 OCC and the Welfare Exemption because now you have 27 properties in California, um, and they run homeless 28 shelters in California and they're benefiting -- 7 1 benefiting California. So you'd think that it would 2 then get the Welfare Exemption. 3 The point being is, by not allowing that Nevada 4 corporation to get the OCC, you're keeping a couple of 5 homeless shelters -- and, again, this is just a 6 hypothetical example, but we actually do have clients 7 where this happened -- basically happened. 8 You're keeping the, um, California homeless 9 shelters from getting the Welfare Exemption. And I 10 think everyone would realize that we'd want those 11 homeless shelters to have the Welfare Exemption. They 12 have -- they have a nonprofit that owns them. They -- 13 they -- they're giving a community benefit to California 14 in particular. 15 And because it's applied at the OCC level, at 16 the Board level, and not necessarily always applied at 17 the local level, or maybe even additionally it's applied 18 at the local level, you can't get it. But if you take 19 it away at the top level, and you give the OCC to that 20 person but then you always analyze the property and see 21 if that property, how they are using it -- are they 22 using it to benefit California? You know, are they 23 using it -- that's where their research to benefit, you 24 know, California water supply. Or are they using it for 25 homeless shelter. Are they using it for a food bank? 26 You know, if they weren't using it -- here's an 27 example where they might not be using it for a 28 California benefit. Let's just say that the nonprofit 8 1 that would typically meet this definition owns a -- 2 um -- um -- a food -- uh -- uh, distributor site that 3 feeds impoverished families. But it's right on the 4 border of Arizona, and they only ship the food to 5 Arizona. It just so happens to be in California, but 6 all the food from there goes to California. 7 Well, maybe in that situation they -- they 8 shouldn't get the Welfare Exemption because there is no 9 benefit to California. Arguably maybe there is. I 10 don't know. But I'm just giving an example. 11 So basically our firm is just trying to, um -- 12 or hoping the Board would maybe move the Community 13 Benefit Test down, if they keep the Community Benefit 14 Test, on the California level -- which is arguable with 15 the Camps Newfoundland case. But I don't want to get 16 into that. I just want to focus on this one issue -- 17 and move it down to the local assessors and let them 18 determine whether the property is being used to, um -- 19 how the use of the property is being used to benefit 20 California, instead of immediately not allowing the 21 organization, based on the OCC level. 22 And -- and the main reason is, for example, is 23 like I point out, where you could lose it when they 24 actual -- it is being benefited, you have a -- a -- a 25 qualifying entity. The only problem is the dissolution 26 clause goes through another qualifying entity, but that 27 entity for some reason at this point in time doesn't 28 benefit California. 9 1 I might have used the three minutes. I'm 2 sorry. 3 MR. HORTON: Oh, don't worry. 4 Uh, let's hear from Mr. Moon on that. 5 MR. MOON: Um, well, there was a lot there. 6 Um, I guess -- I guess what I would say, um -- 7 well, first of all, the way that the Welfare Exemption 8 is administered, of course you know that we give the OCC 9 and the county assessors look at the use of the 10 property. 11 The Community Benefit Test and the 12 determination of what community is benefited is, uh, 13 looked at by both us, uh, at the organizational level 14 and then by the assessors at the property level. 15 As a practical matter, I would agree, uh, with 16 Mr. Broege that, um, it is, uh -- the assessors are 17 closer to the property, so they can make a better 18 determination as to exactly whether the use of the 19 property is benefiting the California community or not. 20 I would also say, however, though, that under 21 what I think I understood some of his facts to be, if 22 there was, for example, um, a homeless shelter, um, in 23 some part of California and they were doing some other 24 activity outside, but the property here was exclusively 25 being used for homeless people here, uh, I don't -- I 26 don't see that as a problem for that organization to get 27 an OCC based on the use of that property and the -- and 28 the benefit that they're providing to the California 10 1 community. 2 MR. HORTON: Member -- 3 MS. MANDEL: Mr. Horton. 4 MR. HORTON: Member Yee and then Member Mandel. 5 MS. YEE: Uh -- thank you, Mr. Chairman. 6 The focus is a little bit different in this 7 discussion today, but it's actually, uh, a really 8 important focus. 9 Uh, what gave rise to my inquiry was really, 10 um, the, uh, situation that the New York Times article 11 triggered. And, um, thank you, Mr. Moon, for the 12 clarification with respect to the organization that was 13 cited in that article. 14 And, uh, it had to do with the policy, uh, that 15 we -- the prior Board previously visited relative to, 16 uh, international aid organizations and where we had 17 organizations that, uh, served a global purpose, uh, but 18 did so through, uh, owning property here in California. 19 And I think this Board, uh -- we had, uh, I 20 think, a request for a legal opinion with respect to 21 eligibility for the OCC by, uh, one of those 22 organizations. And the Board did determine that, um, in 23 that situation where, uh, clearly the benefit, uh, was 24 going to be experienced primarily by persons outside of 25 the state, that, uh, the Organizational Clearance 26 Certificate would not be granted in that situation. 27 In this case, um, I find the speaker's point 28 kind of compelling because I don't know, um, in terms of 11 1 our Exemptions Unit actually looking at applications for 2 an Organizational Clearance Certificate, um, is there, 3 uh -- is there consideration about, um, property that 4 they use in California at that stage of consideration? 5 MR. MOON: There is. We would look at all of 6 the facts and circumstances. I don't believe there's a 7 specific question that says, um, Do you have property in 8 California and are you using it, um, for people's 9 benefit here? 10 MS. YEE: Mm-hmm. 11 MR. MOON: But in terms of all of the 12 information that we would gather and that they would 13 provide in their application, and often times the 14 multiple back and forth in terms of documentation 15 requests -- 16 MS. YEE: Mm-hmm. 17 MR. MOON: -- that's information I would think 18 we would ordinarily know and would be taking into 19 account in making a determination. 20 MS. YEE: And in this situation I would say 21 then that the, um, strictly, uh, quantifiable, I guess, 22 look at this would probably not be the best way to look 23 at it. 24 MR. MOON: That's correct. 25 MS. YEE: That's really the primary benefit 26 that the organization is providing. 27 MR. MOON: Right. 28 MS. YEE: Is that right? 12 1 MR. MOON: Yeah. 2 MS. YEE: Okay. 3 MR. MOON: Yeah, we would -- we would look at 4 benefit that was being provided here, the homeless 5 shelter. 6 MS. YEE: Okay. Um, I'm going to have 7 Ms. Mandel go. 8 I actually also wanted to just look at 9 internally whether we're consistent with respect to how, 10 um, Legal and County-Assessed Properties may be looking 11 at this. I -- I -- I understand the facts in each 12 application is, um, going to vary, uh, from one to 13 another. On the other hand, I want to be sure we're 14 consistent in that, certainly for assessors, uh, who 15 aren't able to grant the Welfare Exemption without the 16 approval of an OCC, um, understand that process as well. 17 MR. MOON: Yeah. So, um, the way that it works 18 is when an organization files for an OCC, um, CAPD will 19 run through all of the facts, all of the applications 20 and documentation. Um -- and if they have any 21 questions, they would send that up to Legal for a 22 request, uh, for our opinion on the matter. 23 With, uh -- with respect specifically to 24 community benefit, uh, it has happened where they have 25 requested, uh, our opinion and they -- they -- they 26 would not deny one, um, if there was any question on the 27 facts without asking Legal's opinion, uh, first. 28 MS. YEE: Okay. All right. 13 1 Thank you, Mr. Chairman. 2 MR. HORTON: Thank you. 3 Ms. Mandel. 4 MS. MANDEL: Sure. Thank you. 5 Um, we had a hearing quite some time ago where 6 it was on whether -- you know, all we hear here is the 7 OCC announces it's been split. And my understanding is, 8 you know, all this case law was before the duties were 9 split. 10 MR. MOON: That's correct. 11 MS. MANDEL: And what I remember during that 12 hearing was I got a little bit confused about why we 13 were talking about how they used the property since we 14 were trying to talk about whether this organization 15 qualified for the OCC. And I was sort of raise -- 16 saying the question that the gentleman said, which was, 17 Isn't it the assessor who has to look at the property? 18 Why are we looking at the property? 19 You know, maybe their whole purpose and 20 everything qualifies, but maybe their, um -- you know, 21 how they use the property maybe means the property 22 doesn't ultimately qualify for exemption. But how does 23 that go to the granting of the OCC? 24 And what I remember staff saying is -- and 25 maybe it's just because everything comes from the same 26 cases and now we just have split duties, where it was 27 that the Board did need to look at, um, how the property 28 was being used in part in determining the OCC. And that 14 1 seems to be what you're saying is you look at all the 2 facts and circumstances. 3 But then what I hear is, well, you could have a 4 situation where, um -- I mean I heard him say two 5 things. One is just property inside California that's 6 doing the good stuff and they happen to also in the same 7 entity have property outside California. And what if 8 they double the size of the homeless shelter in Nevada 9 or Arizona or wherever it might be, you know, then 10 they're more outside than inside. And that's where I 11 think Ms. Yee was saying, well now that legal opinion 12 that's in the paperwork talks about it being a 13 qualitative look at whether they're doing something good 14 here in California, right? 15 MR. MOON: Yes. 16 MS. MANDEL: So it's not a strict, where's more 17 than half primarily -- 18 MR. MOON: That's correct. 19 MS. MANDEL: -- concept. 20 Um, so I guess one question with that is, you 21 know, is there -- is there an issue out in the world 22 that's confusing people because this word "primarily" 23 popped up somewhere along the line? And maybe that 24 needs to be clarified so that people don't -- I mean, I 25 don't know if there's practitioners out there who think, 26 oh, my gosh, you know, if it's -- we got to watch out if 27 it's more than -- you know, primarily, you're talking 28 about a bunch of tax people, and it seems to have some 15 1 meaning. 2 So I'm just kind of wondering if there's -- 3 MR. MOON: I haven't heard anything -- 4 MS. MANDEL: -- if that's part of it. 5 MR. MOON: I haven't heard anything specific, 6 but there may -- that may be an issue and that may be 7 what -- one of the things that led the attorney that was 8 cited in the New York Times article to -- to -- to think 9 that, um, we were applying the test that way. 10 Um, to an extent that some clarification, uh, 11 would be helpful, we of course would be more than happy 12 to do that, um, at the Board's direction. And it sounds 13 like that may be a good thing. 14 MS. MANDEL: I mean is it -- is it that you're 15 sort of looking for some sort of meaningful substantive 16 benefit -- 17 MR. MOON: That's correct. 18 MS. MANDEL: -- in California? 19 MS. YEE: Yeah. 20 MS. MANDEL: I mean that sounded like that was 21 one of your points. 22 MR. BROEGE: Two things. One, when you do read 23 "primarily" you think over 50 percent. 24 MS. MANDEL: Right. 25 MR. BROEGE: Yeah. And then -- and then even, 26 you know, they use the terms when they define it as 27 prime or meaningful. I like the word meaningful. 28 MS. MANDEL: Yeah. 16 1 MR. BROEGE: But then it says "i.e. first 2 rank". First rank's kind of -- implies plurality. So 3 if you're 32 percent -- 4 MS. MANDEL: I don't know. I could have six 5 reasons and maybe one them's only 12 percent, but it's 6 the biggest one. I don't know. 7 MR. BROEGE: Yeah, yeah, yeah. I don't know. 8 The other reason I was trying to put across is 9 that I think maybe -- 10 MS. MANDEL: That math doesn't work. 11 MR. BROEGE: Maybe the California -- defining 12 community as California is good at the local level. But 13 at the OCC level, maybe the defining community should be 14 broader than that because in my example the underlying, 15 um, corp -- uh, nonprofit corporation wouldn't be able 16 to get it because it's, uh -- 17 MS. MANDEL: Well, that was my second thing 18 that I was getting to. Because I thought I heard you 19 say two things and one was just where the property is. 20 MR. BROEGE: Okay. I'm jumping. 21 MS. MANDEL: And the -- yeah, you're jumping. 22 Um, you must be related to me. And the -- but he's not. 23 And the -- the other thing had to do with the, 24 um, inside -- California entity and an out-of-state 25 entity where the ultimate -- uh, the member of the 26 California entity was an out-of-state entity so that the 27 dissolution clause of the California entity went up to 28 the Nevada entity. And is that just a thing that's, you 17 1 know, just a problem with setting up, um, entities under 2 the way the Welfare Exemption works, so that their 3 dissolution clause is for the California entity just is 4 going to create a problem for them if they have an 5 out-of-state member? Is that just, like, a problem 6 that's not resolvable other than setting up a 7 separate -- I don't know -- something? 8 MR. MOON: Yeah, well, his example of the 9 irrevocable dedication clause is it comes directly from 10 the rule because the rule requires that it be, um, 11 irrevocably dedicated to a qualifying organization, 12 meaning qualifying under section 214. And to be 13 qualified under section 214, it has to meet the 14 Community Benefit Test. And so, um, they would have to 15 draft the Articles of Incorporation in such a way to 16 take that into account. 17 But, uh, I do see where that could be an issue. 18 Um, I would think, without being able to quickly come up 19 with an example, but I would think that, um, some 20 creative drafting of the Articles of Incorporation might 21 be able to solve that. 22 MR. BROEGE: That could be the case, but 23 sometimes you need it to go to that, uh, corporation, 24 and they just don't have a California presence. 25 So it's a little strange because if it -- it's 26 the dissolution clause. You need the irrevocable 27 dedication, but you also need the dissolution clause. 28 MR. MOON: That's right. 18 1 MR. BROEGE: And it's the dissolution clause. 2 So if the underlying California entity did dissolve and 3 went to the Nevada entity, that Nevada entity could now 4 get the Welfare Exemption because it would have a 5 meaningful benefit in California. But it can't have the 6 OCC before because it has no meaningful benefit to 7 California at that time. But its underlying entity, I 8 mean, clearly -- 9 MS. MANDEL: We may be making everybody dizzy, 10 so maybe you guys need to engage on that, um, aspect. 11 MR. BROEGE: I think it's just explaining it at 12 the upper level that might help. 13 MS. MANDEL: Because that part of it's kind of 14 news to me. But the other part about properties in and 15 out and -- was something I was kind of prepared on a 16 little bit. 17 MR. HORTON: Okay. Member Yee. 18 MS. YEE: Um, just a follow-up question. I, 19 uh -- I think maybe some additional clarification, I 20 would agree, on this whole -- and I think I would like 21 to see the term "primary", uh, be removed. Maybe it's 22 meaningful, substantial, but just anything that doesn't 23 suggest there's like a percentage test. 24 MR. MOON: Certainly. 25 MS. YEE: Um, and then secondly, uh, Mr. Moon, 26 you described the, uh, process of, um, the Legal 27 Department being consulted should there be any question 28 that arises from County-Assessed Properties. Um, do you 19 1 have confidence that since the, uh -- was it the last 2 LTA in 2008 that we haven't, um, denied any OCCs as a 3 result of some, you know, more than 50 percent test? 4 MR. MOON: Yeah, I am. I am confident -- 5 MS. YEE: Okay. 6 MR. MOON: -- that that has not happened -- 7 MS. YEE: Okay. 8 MR. MOON: -- since 2008. 9 Yeah, I would also say that, um, if CAPD would 10 have a question, they would of course have asked Legal. 11 MS. YEE: Mm-hmm. 12 MR. MOON: But the ultimate determination would 13 rest with the Board if -- 14 MS. YEE: Sure. 15 MR. MOON: -- if an organization had decided to 16 appeal it. 17 MS. YEE: To appeal it, right. Okay. 18 MR. HORTON: All right. That's good. 19 Further discussion, Members? 20 MR. RUNNER: Just a quick -- 21 MR. HORTON: Mr. Runner. 22 MR. RUNNER: Just a quick observation here in 23 terms of -- 24 Is this on? There. Does that work? 25 Um, I was just looking through, and again, we 26 had asked for a list of those that had been denied, you 27 know, in terms of -- to just kind of get a perspective. 28 Um -- uh -- and particularly those that dealt with the 20 1 issue of the, um, state's, uh -- state's boundaries 2 issues was kind of an interesting issue for us. 3 Um, you know, I -- I -- I -- I guess, if 4 anything, um, as this -- as we develop this 5 discussion -- and I'm not sure, uh, where and how we're 6 going to be going on this. Uh, I think at some point in 7 the future I will like to take us back to some of these 8 discussions, but that's certainly not something we need 9 to do at this moment. But let me just give you an 10 example. 11 One of -- one of the -- one of the revoked ones 12 that we -- that we revoked as a result of not having a, 13 uh -- a clear, uh, within the state's boundaries a 14 presence or a -- a -- a nonprofit charitable work was a 15 group called Mission Aviation Fellowship. Uh, we 16 revoked their, um, -- their, uh, exemption in 2008. And 17 I can tell you, as a result of that, plus a series of 18 other things, they have now moved to Boise, Idaho. 19 Uh, and so my concern in this process is that 20 we are not only sensitive to what it is that we would do 21 in regards to their mission within the communities, but 22 also it seems to me we ought to at least be open to 23 addressing the -- the, uh -- what I would guess I would 24 call the economic impact, of potentially having folks 25 that may have very good works in other places other than 26 California. Uh, and to all of a sudden give them a 27 disincentive to headquarters their work in the state 28 seems to me a -- not only a discussion in terms of how 21 1 it benefits Californians, because I would submit that 2 Californians would feel good about the fact that in 3 their state they are indeed having places that are 4 helping feed people, deal with lots of other kinds of 5 things around the world. 6 Uh, but more importantly, do we actually give a 7 disincentive to create a -- those -- those nonprofits 8 from actually coming to the State of California? Uh, 9 and, to me, that's an issue. And here's one I can tell 10 you right now who actually left California as a result 11 of -- of being revoked. 12 And let me just give you another example. 13 There's a number of them that we've revoked that do 14 feeding programs in Mexico. Now I would submit to you 15 that a feeding program in Mexico, particularly if it's 16 along the border of Mexico, can be very helpful to 17 Californians in regards to its charitable work, even 18 though its boundary is outside the state. 19 So I think those are the kinds of things that I 20 hope maybe at some point in time -- I'm not ready to 21 address it today, but we need to step back and take a 22 look, if maybe for the sake of California benefit, we 23 need to take a step back and take a longer look. 24 I know this is the core issue that was decided 25 in 2008. But, you know, I wasn't here in 2008. And at 26 least maybe it's a discussion that maybe would be ripe 27 for us again to have now that we can see the impact of 28 some of these nonprofits that we've either not approved 22 1 or we've actually revoked as a result of the test. 2 MR. HORTON: Thank you very much, Mr. Runner. 3 Thank you so very much for your presentation 4 today and your testimony, as well as Mr. Moon. 5 Uh, Members, any further discussions before we 6 release these -- 7 MS. YEE: Can I raise one more issue? 8 Ms. Mandel just reminded me of it. 9 Those who have had an OCC denied may appeal -- 10 may appeal the decision? 11 MR. MOON: Yes, they may. 12 MS. YEE: Uh, but there is no, uh, provision 13 for rehearing it if we should deny it? 14 MR. MOON: That's correct. 15 MS. YEE: Okay. Um, may I ask you to revisit 16 that issue? I think it maybe just requires a change to 17 our rules for tax appeals, but -- 18 MR. MOON: Yes. 19 MS. YEE: Because it isn't really, um, focused 20 on, um, an assessment issue and it really, you know, 21 kind of the denial of the OCC, um, I think we probably 22 do want to have a provision for rehearing those matters. 23 MR. MOON: We can take a look at that. 24 MS. YEE: Okay, great. Thank you. 25 MR. HORTON: Member Yee, is that -- do you 26 anticipate, uh, seeking input from others on that? 27 MS. YEE: Uh, sure. I mean, I'm asking Mr. 28 Moon to bring back the feasibility of, uh, being able to 23 1 amend our rules for tax appeals to include a provision 2 that allows for, uh, those who have been denied an OCC, 3 denied the appeal, uh -- 4 MS. MANDEL: Yeah, it was a -- it -- it -- it 5 came up in the past. You know, we don't hear that many 6 of these and we're used to the property tax appeals that 7 we have to do by the end of the year. And, um, there is 8 the provision about not -- you know, Board's decision on 9 a property tax is final. I think that's why she's 10 talking about assessments. But you'll look at that from 11 a legal perspective. But it did come up where, um, I 12 think we'd sort of not realized that there wasn't the 13 availability for a petition for rehearing on an -- on an 14 OCC matter. 15 So that's why, yes, I reminded you of it. 16 MS. YEE: No, you did. 17 And so if, Mr. Moon, just bring back, um, some 18 background on that and we can discuss it at a future 19 meeting. 20 MR. MOON: Certainly, I'd be happy to. 21 MR. HORTON: All right. Excellent. Thank you 22 very much. 23 MS. YEE: Thank you very much. 24 MR. BROEGE: Thank you very much Members of the 25 Board. 26 ---oOo--- 27 28 24 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 September 20, 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 pages 1 13 through 24 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: October 4, 2011 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 25