1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 NOVEMBER 15, 2011 10 11 12 13 14 15 LEGISLATIVE COMMITTEE 16 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 5 Michelle Steel Member 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per Government Code 13 Section 7.9) 14 Diane G. Olson 15 Chief Board Proceedings Division 16 17 For the Department: Margaret Shedd Legislative and Research 18 Division 19 Sheila Waters Legislative and Research 20 Division 21 John Cortez Legislative and Research 22 Division 23 Amy Kelly Legal Department 24 Brad Miller 25 Sales and Use Tax Department 26 27 ---oOo--- 28 2 1 INDEX OF SPEAKERS 2 SPEAKER PAGE 3 Gina Rodriquez 9 4 Robert Wils 13 5 ---oOo--- 6 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 NOVEMBER 15, 2011 4 ---oOo--- 5 MR. HORTON: Good morning. 6 MR. RUNNER: Good morning. 7 MR. HORTON: Let us reconvene the meeting of 8 the Board of Equalization. 9 Ms. Olson, what is our first item? 10 MS. OLSON: Our first item on today's agenda is 11 the Legislative Committee, and Mr. Horton is the Chair 12 of that Committee. 13 Mr. Horton. 14 MR. HORTON: Thank you very much. 15 Members, we have before us today Miss Margaret 16 Shedd and Sheila Waters, and I presume Brad will be 17 joining us possibly later. 18 So, welcome. And we're going to turn this over 19 them. 20 MS. SHEDD: Thank you very much. Good morning, 21 Mr. Chair and Members of the Committee. 22 My name is Margaret Shedd with the Legislative 23 and Research Division. 24 Before we begin with the agenda, I'd like to 25 announce updates to that. There are two items that have 26 been put over; that's 3-2 and 3-3. 27 There is a consent agenda on seven items; those 28 are 2-1, 2-4, 3-1, 3-4, 3-5, 3-6 and 3-7. 4 1 So, um, I'll start the discussion. There will 2 be three items remaining that we will discuss and vote 3 on. The first of that is -- 4 MR. HORTON: Ms. Shedd, before we start, let's 5 see if the body's prepared to move the consent items. 6 MS. YEE: Move adoption. 7 MR. HORTON: Move adoption by Member Yee. 8 MS. STEEL: Second. 9 MR. HORTON: Second by Member Steel. 10 Without objection, such will be the order. 11 Please continue. 12 MS. SHEDD: Thank you. The first item before 13 us is, um, Suggestion No. 2-2. This would amend the 14 sales and use tax in the other tax and fee programs 15 administered by the Board, uh, to provide that, uh, the 16 BOE will withdraw a lien after a taxpayer, a fee payer 17 or a surcharge payer pays the delinquent liability for 18 which the lien was filed. 19 Um, the source of this proposal is Board Member 20 Runner. 21 I have Sheila Waters with me from my staff to 22 answer any questions. 23 Um, just by way of background, under the 24 current law the Board may release a lien under specified 25 circumstances, including situation where the lien was 26 filed in error or the situations where the taxpayer pays 27 the outstanding liability in full. 28 Um, however, unless the lien was filed in 5 1 error, the release does not remove that lien from the 2 taxpayer's credit record. To remove the lien the 3 taxpayer -- from the credit record, a withdrawal is 4 required. 5 Under existing law, the Board has no statutory 6 authority to withdraw a lien. A withdrawal of the tax 7 lien essentially removes the notice of the tax lien from 8 the public record, essentially canceling the lien from 9 the taxpayer's credit record. 10 Um, this proposal was prompted by recent 11 announcement by the IRS, which can do this by 12 regulation, regarding their latest effort to help 13 struggling taxpayers obtain a fresh start with their tax 14 liabilities. 15 Part of this effort included making changes to 16 the lien filing practices, including withdrawing a lien 17 when a taxpayer resolves his or her outstanding 18 liability with the IRS. 19 Um, the problem under current law is that once 20 it's released, it still remains on the credit record for 21 10 years. Um, this proposal would provide a significant 22 incentive to taxpayers to resolve their tax debts more 23 expeditiously. 24 MR. HORTON: Thank you very much. 25 Discussion? 26 Mr. Runner. 27 MR. RUNNER: Yeah, we just saw this as a, uh -- 28 a -- trying to become a little more, uh, consistent with 6 1 what IRS is doing. And also see it as a potential for 2 us to, um, get taxpayers motivated. 3 The idea of having something come off, um, of 4 your, um, credit report at that point is, we think, a 5 motivation for them to try to come to resolution. 6 And so, it just gives another tool for our 7 collectors. And so that's why we put it forward. 8 MR. HORTON: Thank you very much. 9 Member Yee. 10 MS. YEE: Thank you very much, Mr. Chairman. 11 Um, a couple of questions. And I don't 12 disagree with the direction that this proposal, uh, is 13 going. And, uh, I think certainly the spirit of the IRS 14 program in providing taxpayers with a fresh start, uh, 15 makes sense. 16 But I was curious as to why, uh -- and maybe, 17 um, this is a question for staff. But a couple 18 components of the IRS program, uh, that I didn't see 19 reflected here speaks to a filing history, uh, that 20 there had needed to be -- or that there has to be kind 21 of a period of years where there's a good filing, um, 22 history. 23 And then, uh, the other question I would have 24 is, uh, is this something that's kind of a once in a 25 lifetime thing? Or how frequent are we offering the 26 lien withdrawal? 27 MS. SHEDD: The proposal, uh, doesn't have the 28 specifics in it. It's permissive. So I think the 7 1 Board, under their regulation authority, can put those 2 parameters in. 3 MS. YEE: Okay. 4 MR. RUNNER: And I -- and I -- and I would 5 think that both of those are reasonable issues to be 6 addressed in terms of trying to help the taxpayer 7 understand potentially that this is a one-shot issue. 8 MS. YEE: Okay. 9 MR. RUNNER: That there has to be some kind of 10 a, uh -- again, trying to deal with somebody who's just 11 kind of caught up in the economy versus somebody who's 12 a, uh, consistent with not following through on their 13 tax obligations. 14 So -- and I think, again, rather than my -- I 15 think my preference would be to send it down the street, 16 have them deal with it that way. If they want to add on 17 some of those, that's fine. But regardless, we can come 18 back and address that in a regulatory path. 19 MS. YEE: Okay. And then is this proposal, um, 20 similar to what, uh, had been previously introduced 21 which also includes the Franchise Tax Board, this one? 22 MR. RUNNER: No. The Franchise Tax Board has 23 been removed at this point. 24 MS. YEE: Okay. Good. 25 MS. SHEDD: Right. That was SB 228 -- 26 MS. YEE: Right. 27 MS. SHEDD: -- (Wyland). And this is only 28 Board of Equalization. 8 1 MS. YEE: Okay. Very well. Thank you. 2 MR. HORTON: Further discussion, Members? 3 MS. OLSON: Mr. Horton, we do have a speaker, 4 Gina Rodriquez. 5 ---oOo--- 6 GINA RODRIQUEZ 7 ---oOo--- 8 MR. HORTON: Okay. Ms. Rodriquez with the, um, 9 CalTax, the Vice President of the Tax Policy. Welcome. 10 MS. RODRIQUEZ: Thank you, Mr. Chair, Members. 11 Gina Rodriquez with CalTax. 12 We want to first thank Senator Runner for, uh, 13 proposing this. We support this. Um, we feel that the 14 IRS has done quite a few things to help taxpayers in 15 this economic downturn. California should be following 16 suit, if not be out in front. But this is a good start. 17 We would also like to see the Franchise Tax 18 Board included as they have a significant inventory of 19 liens on their books and, uh, taxpayers would benefit 20 from that as well. 21 Thank you. 22 MR. HORTON: Um, Ms. Shedd, I would encourage 23 us to leave it open-ended as far as the regulatory 24 process so that we're not making any recommendations. 25 But, um, certainly, um, embodying the essence so that 26 they don't restrict what Ms. Yee has sort of, uh, 27 brought out, the concern Ms. Yee has sort of addressed 28 that they're not exactly -- the language isn't such that 9 1 we don't have the regulatory authority to deal with the 2 nuances of the issues that are before us relative to 3 this. 4 Further discussion, Members? 5 MS. SHEDD: Is there a motion? 6 MR. HORTON: Is there a motion? 7 MR. RUNNER: I'd move the item. 8 MR. HORTON: Moved by Member Runner. Second by 9 Member Yee. 10 Without objection, Members, such will be the 11 order. 12 Next item? 13 MS. SHEDD: Thank you. The next item is 14 Suggestion 2-3. This was, uh, proposed by the Legal 15 Department, and it would make permanent the Board's 16 ability to compromise certain final tax liabilities for 17 businesses that are open and active, and if the final 18 tax liability arises from a transaction which the 19 taxpayer did not receive sales tax reimbursement or use 20 tax. Also, it applies to persons liable as successors, 21 and also to consumers who have incurred a use tax 22 liability. 23 Uh, I have with me Amy Kelly from the Legal 24 Department and John Cortez from my staff to answer 25 questions. 26 Just a little background. Uh, current law 27 which was enacted in AB 2047, which was Mr. Horton's 28 bill, um, spans the period from 2009 to 2012. Uh, it's 10 1 set to sunset in January 1 of 2013. This would make 2 that program permanent. It has been, uh, successful to 3 date. The Board has accepted offer funds of five -- 4 over 533,000 while compromising over 357,000, for 5 liabilities totaling, oh, about $900,000. 6 Uh, if you have any questions, we'd be happy to 7 answer them. 8 MR. HORTON: Discussion, Members? 9 MS. YEE: I'm ready to move adoption of this. 10 I think this has been a really, really great program to 11 offer, particularly during these really challenging 12 times for a lot of businesses. 13 MR. HORTON: Moved by Member Yee. Second by 14 Member Steel. 15 Without objection, Members, such will be the 16 order. 17 Thank you very much for bringing this forth. 18 You know, the downturn of another member 19 carrying the old bill is you sort of disappear. 20 Anyway. Oh, that's on the mike. 21 Ms. Shedd. 22 MS. SHEDD: And our next and final item is 3-4. 23 This, um, would require local governments to contract, 24 for the purchase of tangible personal property, with 25 vendors or contractors that have a valid seller's permit 26 or a certificate of registration for use tax. 27 This, uh, proposal was brought forward by the 28 Sales and Use Tax Department. It was discussed at the 11 1 September Board meeting. We had a stakeholders board -- 2 stakeholders meeting on it in October. 3 It would extend the current law which was 4 enacted in SB 2009 -- or, I'm sorry, SB 1009, in the 5 year 2003, which was a use tax compliance measure and 6 was prevent -- intended to prevent a state agency or 7 department from contracting for the purchase of goods 8 with any vendor or contractor that does not have a valid 9 seller's permit and has not registered with the BOE. 10 It was intended to send a signal to the State 11 of California that it does not wish to do business with 12 entities that do not collect sales or use tax on behalf 13 of the state. 14 Um, if the vendor lacks a valid seller's permit 15 or certificate of registration, the state agency is 16 precluded from purchasing unless -- and there's an out 17 in both, for the state and under this proposal -- the 18 state or local agency in the proposal makes a finding 19 that the purchase is necessary to meet a compelling 20 state need or the purchases are otherwise nonqualifying 21 purchases, um, per statute. 22 Under this proposal, the term "local 23 government" includes city, county, city and county, 24 community college district, school district, county 25 superintendent of schools, and special district located 26 in California. 27 I have with me Mr. Brad Miller from the Sales 28 and Use Tax Department who can answer any questions. 12 1 MR. HORTON: Welcome, Mr. Miller. 2 Members, before we open for discussion, I'd 3 like to hear from Mr. Robert -- Wims? 4 MR. WILS: Wils. 5 MR. HORTON: With Muni Service. He is the 6 Senior Local Tax advisor for Muni Service. 7 Please come forward, sir. 8 ---oOo--- 9 ROBERT WILS 10 ---oOo--- 11 MR. WILS: Good morning, Board Members. 12 MR. HORTON: Good morning. 13 MR. WILS: Um, I just have a few, uh, things 14 to -- to say on this. 15 Uh, I notice that there's been a paragraph 16 added about the, uh, local governments using a use tax 17 direct pay permit. The fact is that most cities -- 18 specifically cities and counties don't have a use tax -- 19 a direct pay use tax permit. There's maybe 25 to 30 20 total out of all the cities and the counties in the 21 state. 22 Uh, during the stakeholders meeting staff made 23 a point of that most cities don't have a seller's 24 permit -- uh, I mean, not registered with the Board, 25 thereby not being able to self-accrue the tax that they 26 were buying. But yet, in the, uh, paper here it says, 27 "Presumably local governments already 28 self-assess and pay the use tax on their 13 1 purchases." 2 Well, if they don't have the permits, how are 3 they -- how are they self-registering? 4 Our position is that most do have permits, by 5 the way, not that they don't. But it's -- it just 6 seems, uh, counter-argued -- you know, the staff is 7 countering themselves in what they say in the 8 stakeholders meeting to what's written in the paper. 9 That's -- that's all I need to say here or have 10 to say here. 11 MR. HORTON: Okay. 12 Mr. Miller. 13 MR. MILLER: Yes. Thank you. 14 Uh, good morning, Members. Brad Miller with 15 the Sales and Use Tax Department. 16 Um, we are aware that most -- um, well, I 17 wouldn't say all cities and counties have permits. 18 We -- we -- we would agree with the statement that most 19 of them do and do have the ability to self-accrue and 20 report the use tax. 21 MR. WILS: Well, there was a big -- it was a -- 22 it was a point that was really made at the stakeholders 23 meeting, uh, by, I think, Eric Miethke who had done some 24 kind of study that most cities don't have the permits. 25 And staff seemed to agree with that at the meeting. 26 MR. HORTON: And, um, can we reconcile this? 27 Is there a solution here? 28 MR. MILLER: Well, we can certainly look into 14 1 the status of permits held by cities and counties. 2 Um, again, I'm not aware of a specific instance 3 where most of them don't. 4 I understand what Mr. Wils is saying, and that 5 I do recall the comments made by Mr. Miethke at the 6 meeting. Um, I -- I don't recall staff being fully in 7 concurrence with the fact that most of them don't. We 8 are aware that some of them don't. 9 MS. MANDEL: Mr. Chairman. 10 MR. HORTON: Sure. Ms. Mandel. 11 MS. MANDEL: Um, I -- I don't have, you know, 12 factual, and I wasn't at the meeting. But my 13 recollection of these discussions that have occurred in 14 the past was that there was a belief, at least in -- and 15 I think Mr. Miethke's been the one who has said it 16 before, that in use tax, um, collection that perhaps 17 local government was a place, um -- uh, to look at in 18 terms of are they compliant. 19 And I guess what you're saying -- I thought 20 there was a difference between the direct pay permit -- 21 MR. MILLER: Mm-hmm. 22 MR. WILS: There is. 23 MS. MANDEL: -- and just that the local 24 government, which might be purchasing from out-of-state 25 on registered sellers, um, that they might be 26 self-accruing use tax, that those are not necessarily 27 the same thing. That was the impression I had from the 28 write-up; is that correct? 15 1 MR. MILLER: That is correct, yes. 2 MS. MANDEL: And so, the impression I took from 3 the write-up was that staff was not -- staff was, um, 4 asserting that they -- staff was not going to say in the 5 write-up that they thought local government wasn't 6 paying the tax that they might be owing on 7 out-of-state. 8 MR. MILLER: That's correct. Yeah. We don't 9 believe -- 10 MS. MANDEL: That's how I took that sentence. 11 That, you know, we're not saying you're not paying it, 12 and that the direct pay permits was a different issue. 13 They may or may not have a direct pay permit, right? 14 MR. MILLER: That is correct, yes. The direct 15 pay permit is -- is a different component. It would 16 allow them to directly -- they could issue an exemption 17 certificate to a vendor and allow them to self-report 18 the use tax and accrue -- or accrue and self-report the 19 use tax directly to the Board. 20 MS. MANDEL: Okay. And if they're -- if the 21 local governments are otherwise purchasing in a way that 22 they would owe use tax but not have a direct pay 23 permit -- 24 MR. MILLER: Mm-hmm. 25 MS. MANDEL: -- would they wind up -- would 26 they just be filing the January 31st, or would they wind 27 up being registered? 28 I think what Mr. Wils is saying is, you know, 16 1 if we don't have them registered at all in our system, 2 then they're not -- maybe they're not buying. 3 MR. WILS: Most cities are registered. I 4 believe that most are. 5 MS. MANDEL: Oh, okay. 6 MR. WILS: But it also -- most don't have the 7 direct pay permit. 8 MS. MANDEL: Okay. Okay. 9 MS. SHEDD: But I think the point of the 10 write-up is to say that, even if local governments 11 had -- were registered, to require them, the vendors, to 12 register with the Board also would then mean that all 13 sales -- 14 MS. MANDEL: Other sales. 15 MS. SHEDD: Other consumers would then be -- 16 MS. MANDEL: Right. 17 MS. SHEDD: -- collected. 18 MS. MANDEL: Right. But this is not about -- 19 this is not really about getting the -- 20 MS. SHEDD: -- local government. 21 MS. MANDEL: -- tax from the local government. 22 MS. SHEDD: Right. 23 MS. MANDEL: Making sure that they pay whatever 24 tax they're supposed to pay, of which they would get a 25 part under the normal rules of how they would get a 26 part. But about anyone else those guys sell to. 27 MS. SHED: Exactly. 28 MR. WILS: My -- my point here is that, without 17 1 the -- without the direct pay -- use tax direct pay 2 permit, your -- the tax is being moved. I made this 3 point in the stakeholders meeting. The tax is being 4 moved by the cities self-accruing it, from the cities to 5 the pool, pool allocation. Thereby, the city is going 6 to lose whatever percentage -- 7 MS. MANDEL: Oh, okay. I understand what 8 you're saying. 9 And then I thought what the write-up said was, 10 um, cities could get -- then those cities that do a 11 substantial enough buying in that way would -- they 12 could get a direct pay permit, right? 13 MR. MILLER: That is correct, yes. 14 MS. MANDEL: Is that the resolution for -- 15 MR. WILS: That's the resolution for it. 16 MS. MANDEL: Yeah. 17 MR. WILS: Talking a city into getting one is a 18 different story. 19 MS. MANDEL: Okay. 20 Thank you. 21 MR. HORTON: Mr. Runner. 22 MR. RUNNER: Just to -- a couple questions. 23 Um, the local government can submit or pay a use tax 24 with simply submitting a form, correct? They don't have 25 to have a permit. 26 MR. MILLER: That's correct. Yes. 27 MR. RUNNER: Right. Okay. 28 MR. MILLER: Any -- it's just like any other 18 1 consumer. 2 MR. RUNNER: Right. 3 MR. MILLER: If they don't have a permit -- 4 MR. RUNNER: So they could do it as a qualified 5 purchaser, they could do it in a 79B, they could do it 6 lots of different ways, right? 7 MR. MILLER: That's correct. 8 MR. RUNNER: Okay. Just kind of -- so the 9 whole idea of not having a permit necessarily -- doesn't 10 necessarily mean that the local government isn't able to 11 pay a use tax? 12 MR. MILLER: That's correct. 13 MR. WILS: No, it's just like any other 14 consumer. 15 MR. RUNNER: Okay. Let me just follow up on 16 the issue of the, uh -- of the exception here, um, the 17 idea of compelling need. Who determines compelling 18 need? 19 MR. MILLER: Um, that would be up to, in this 20 case, the local government. 21 MR. RUNNER: So, um, a local government wants 22 to buy something and, uh, it's out-of-state. They don't 23 have a California state seller's permit. And they say I 24 have a compelling need because I can get it cheaper 25 there. Is that a compelling need? 26 MR. MILLER: Um, the provisions, uh, in the 27 proposed statute define a compelling need. Um, it says, 28 "Compelling local government interest includes, 19 1 but is not necessarily limited to, the 2 following: Ensuring the provisions of 3 essential services; ensuring the public health, 4 safety and welfare; or responding to emergency 5 as defined in Section 1102." 6 If they want to make the statement that getting 7 it cheaper falls within that, then -- you know, that's 8 really going to be up to them. 9 MR. RUNNER: And that is -- that is totally up 10 to them. 11 MR. MILLER: It is totally up to them. 12 MR. RUNNER: And the local government is -- 13 this an administrative decision, correct? It's not a 14 decision that's made by the body -- the elected body. 15 That would actually be made by the Director of Finance 16 at that city or -- or school district? 17 MR. MILLER: It would be the governing body of 18 the local entity or person delegated the authority. 19 MR. RUNNER: Okay. 20 MR. MILLER: So they could delegate the 21 authority to -- 22 MR. RUNNER: Whoever. 23 MR. MILLER: -- an administrator or somebody 24 like that. 25 MR. RUNNER: Okay. 26 MR. HORTON: Is there a motion, Members? 27 MR. RUNNER: I'm not -- I'm not inclined -- I 28 mean, to me, this is not a -- the proposal doesn't -- it 20 1 seems to me is not a lot -- a lot of show and no go in 2 this, in regards to what can actually be done. 3 Um, local governments -- it almost looks to me, 4 it smells like a mandate on local governments to which 5 we've given them such a large loophole to drive through 6 that, uh, we avoid a local mandate issue, you know, in 7 terms of cost. 8 Um, and I -- it seems to me that there's plenty 9 of ways for local governments to pay their use tax in 10 school districts. And when indeed they're not, those 11 are some of the easiest places for us to go and find and 12 audit. 13 So I'm -- the idea of having this as a 14 requirement, I'm -- I'm not supportive of. 15 MS. MANDEL: Um, well, I'll move it because I 16 think it's not about getting local governments to pay 17 their taxes, which the premise is that they're paying 18 their taxes. Um, but to find a way to make sure that 19 everybody everybody's doing business with is registered 20 to collect the taxes. And, um, the goal is that there 21 will be other -- other people, um, in the state doing 22 purchasing. That's the presumption of it. And it's the 23 same as the state law. 24 So I don't know if there was a reason why they 25 weren't in the original. But, um, it seems like the 26 purpose of it is not -- is to get, uh, more sellers, 27 people selling it to California registered. 28 MR. HORTON: True. 21 1 MS. YEE: I'll second the motion. 2 MR. HORTON: It's been moved by Ms. Mandel. 3 Second by Member Yee. 4 Uh, further discussion, Members? 5 Uh, Members, I would add that, uh, many of the 6 laws on the books simply are there, uh, for purpose of 7 education, enforcement and notification. So -- and it 8 takes the enforcement arm in order to make the law 9 effective. 10 Something as simple as stopping at a stop sign, 11 it's not going to happen without an element of 12 enforcement, an element of knowledge and awareness, and 13 a sense of -- that compels you to do so. So often time 14 we -- we pass these sorts of laws for those purposes. 15 With that, further discussion, Members? 16 Uh, I would encourage us to support it. 17 It's been moved by Ms. Mandel, second by Member 18 Yee. 19 Is there objection? 20 MR. RUNNER: Yeah. 21 MS. STEEL: Objection. 22 MR. HORTON: Objection noted. 23 Uh, Ms. Olson, please call the roll. 24 MS. OLSON: Mr. Horton. 25 MR. HORTON: Aye. 26 MS. OLSON: Ms. Steel. 27 MS. STEEL: No. 28 MS. OLSON: Mr. Runner. 22 1 MR. RUNNER: No. 2 MS. OLSON: Ms. Yee. 3 MS. YEE: Aye. 4 MS. OLSON: Ms. Mandel. 5 MS. MANDEL: Aye. 6 MS. OLSON: Motion carries. 7 MS. SHEDD: Thank you. And that concludes the 8 Legislative Committee Meeting. 9 MR. HORTON: Thank you very much for your 10 presentation here today. 11 ---oOo--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 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 November 15, 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 23 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: December 12, 2011 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 24