1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 FEBRUARY 28, 2012 10 11 12 13 ---oOo--- 14 PUBLIC COMMENT 15 WILLIAM CONNELL 16 ---oOo--- 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 Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 Marcy Jo Mandel Appearing for John 10 Chiang, State Controller (per Government Code 11 Section 7.9) 12 Diane G. Olson 13 Chief Board Proceedings Division 14 15 ---oOo--- 16 17 Speaker: William Connell 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 FEBRUARY 28, 2012 4 ---oOo--- 5 MR. HORTON: Members and guests, let us 6 reconvene the meeting of the Board of Equalization. 7 Ms. Olson, what is our next item? 8 MS. OLSON: We have a public speaker, 9 Mr. William Connell. 10 MR. HORTON: Thank you. 11 Would Mr. Connell please come forward, sir. 12 Uh, for the record, Mr. Connell is here on 13 veterans' tax exemption issues. Uh, he's the owner of 14 Surf Dog. 15 MR. CONNELL: Good afternoon. Happy New 16 Year. 17 MR. HORTON: Welcome back. 18 MR. CONNELL: Welcome back. 19 Um, good afternoon. Thank you for the 20 opportunity to address you, the most honorable. 21 Today I come before you requesting the State 22 Board do three things: Number one, recognize Senate 23 Bill 809 that was enacted in 2009; recognize Senate Bill 24 805 that was just signed into law by our Governor Brown; 25 and recognize the original ventured statute of March 26 24th, 1893 in its entirety. 27 Um, the recognition of the original enactment 28 would begin to allow the State Board of Equalization to 3 1 administratively return the tax monies to the disabled 2 American vendors that were taken in error. The serial 3 commas between the words "license, tax or fee" that make 4 serial nouns of the word "license, tax or fee" is in its 5 plain English meaning exactly what it is. This started 6 because of a misinterpretation of a existing state law. 7 I'd like to clear this up once and for all. 8 Uh, the American veteran has earned this 9 exemption. Now more than ever, with 24 percent of the 10 returning veterans unemployed, it's going to give them a 11 good shot of making a little living. Going to give them 12 a good try. Someone has to speak for them; I am. 13 Um, I want you to recognize the 1893 Act, and 14 this way it would be able to remove the sunset clause 15 that's now extended to 2022. It would then allow the 16 State Board administratively to contact those veteran 17 vendors who have requested and continuously requested 18 for their exemption to be honored to return their tax 19 money to them. 20 We're not talking hundreds of thousands or 21 millions of dollars. We're talking small, little, tiny 22 people who didn't have the where -- wherewithal or the 23 resources or the time to do what I've done for the last 24 18 years. 25 Anything else you want me to do, I'll do it. 26 This law was in the -- in our enactments for the benefit 27 of everyone. Get the veteran off the welfare roles. 28 Get them working. 4 1 Now, I just don't want what I say here to just 2 die in this room. I'd like to -- and I'm going to try 3 to see if I can speak to our Governor and there can be 4 some more programs for veterans that he could help with. 5 And finally, um, if I can save up enough money, I'd like 6 to maybe see if I could talk with our Commander in Chief 7 on just how bad it is for the returning veteran. 8 This economy is this economy. But there's 9 certain people that deserve and have earned a really 10 good shot at making the American dream. 11 The last time I came before you, I used all my 12 Christmas money. I had to save up enough money to come 13 back up here again today. 14 I'd like some action on this. I would like you 15 to please recognize the original act of 1893 with the 16 serial commas and the serial nouns. Once that's done, 17 then we can start to try to regroup and repair and 18 refund the monies that were taken, by mistake, from a 19 simple misreading of a State statute. 20 I've taken enough of your time. I'd like to 21 please hear from you. And I'd like to have my case and 22 the other cases all combined; save time, save money. 23 You look at my original case, I wasn't allowed to call 24 witnesses, I wasn't allowed to put forth information. I 25 was shuffled off out of here like you wouldn't believe. 26 I've learned an awful lot since then, and not 27 from any book, just by the experience; some pleasurable, 28 most of it pleasurable the last few years. 5 1 Please help. It's simple to do. Recognize the 2 original act and we can work from there. If you need me 3 to contact anybody -- if I haven't knocked on somebody's 4 door in that -- that State Capitol over there, it's 5 probably the janitor. I've seen every elected official 6 over the last three election cycles. Please, I am so 7 passionate about this. 8 If you have any questions. 9 MR. HORTON: Thank you very much for your 10 presentation. 11 Discussion, Members? 12 Um, thank you for appearing before the Board 13 today, um, and for all the times that you've come before 14 the Board to champion this issue, this important issue, 15 um, and in an effort to clarify, um, what the 16 legislation -- legislature seems to have, uh, attempted 17 to address to some degree but not completely address all 18 of the concerns that you've articulated to us. 19 And, um, I don't know, possibly we can ask our 20 legal team to assist us to some degree in developing 21 some language or something that might be able to give 22 the legislation some guidance, if it's their intent to, 23 one, make this retroactive, two, to codify, um, your, 24 um, vision of the original statute. 25 Um, let us give this some thought. 26 MS. YEE: Mr. Chairman. 27 MR. HORTON: Member Yee. 28 MS. YEE: Thank you, Mr. Chairman. 6 1 I also want to thank Mr. Connell for the 2 extraordinary measures he's taken to, um, bring 3 attention to this issue and resolution. 4 Um, we do have a new gubernatorial 5 administration, and I think it might be helpful to try 6 to engage them on, uh, what, uh -- on this 7 administration -- with this administration on what it 8 intends to do relative to, uh, benefits or services for 9 veterans generally, um, and perhaps having this in the 10 mix with respect to, um, the issues that -- for 11 consideration by them. 12 Um, I would be open to looking at, um, what we 13 might be able to do. We did -- we did fix the problem 14 going forward in terms of how we -- 15 MR. CONNELL: Correct, and it was perfectly 16 worded. 17 MS. YEE: So that -- that part is done and 18 we're really focused on the back issues. 19 MR. CONNELL: We're fine. 20 MS. YEE: And, um, which I still maintain we, 21 as a Board, do not have authority to act on. And I know 22 we have a difference of opinion on that. Um, but I'm 23 happy to see whether there is legislative interest to 24 try to address it, um, through legislation. Uh, but 25 it's a very tough environment right now to do that. But 26 that's certainly something I'm happy to speak to our 27 colleagues up the street about. 28 MR. HORTON: Yeah, um, legislating 7 1 retroactively is always a challenge -- 2 MS. YEE: It's challenging. 3 MR. HORTON: -- for any legislature at any 4 given time. To unwind what has evolved over a period of 5 time, through a number of, uh, deliberations, is always 6 complicated and typically very rare that that does 7 occur. 8 But perspectively certainly, um -- um -- 9 MR. CONNELL: I have a question. Would there 10 be any reason why you would not recognize the 1893 11 enactment as written? I've never heard you guys 12 recognize it. 13 MR. HORTON: Well, the -- it's -- it's not that 14 we don't recognize it. It is the interpretation that, 15 um, legal counsel, uh, has -- we've been advised that we 16 don't have the authority in that the interpretation's 17 inconsistent, the courts, as well as legal counsel. 18 That's the reason for the legislation is to -- 19 is to amend basically. They really didn't clarify. 20 They actually amended the, uh -- the, uh, statute to be 21 consistent with the interpretation that we all support, 22 which is consistent with yours. 23 MR. CONNELL: Correct. 24 MR. HORTON: Um, we're all in agreement there. 25 And, fortunately, with the leadership of Member Yee, um, 26 that was able to happen. And I'm very grateful, and I 27 know a lot of veterans are very grateful to her and her 28 work and the work of the legislature in that regard. 8 1 Um, it's just a question of making it retroactive, uh, 2 is the real challenge. 3 So, unless there's, um, some legal, uh -- I 4 mean, judicial -- court, if a court steps in and 5 provides us, uh, some interpretation that the 6 legislature has gotten it wrong and that the Board of 7 Equalization does have the authority, uh, then we can 8 act upon that, uh, judicial decision. That might give 9 us some guidance. 10 MR. CONNELL: Would you be able to ask the 11 Attorney General now that 805 is law and that 809 is 12 law, uh, could you go back to our Attorney General and 13 please, could you update your, uh, opinion on this? 14 Because they never included the 1893 Act at all. 15 MR. HORTON: You know, I'm not -- if I'm not 16 mistaken, I believe we, uh, attempted that. And the 17 AG's response was not favorable to, uh, your 18 conclusions. And so we would basically be asking the AG 19 the same question, in that the legislation is 20 perspective and it didn't deal with the, uh, retroactive 21 aspect of the language of the bill. 22 MR. CONNELL: Mm-hmm. 23 MR. HORTON: So we would be asking the same 24 question, covering the same territory and, 25 theoretically, the response would be the same. 26 MR. CONNELL: Tell me where I have to go. What 27 door do I knock on? 28 MR. HORTON: The -- 9 1 MR. CONNELL: And one other question would be, 2 I don't think we're talking hundreds of thousands of 3 veterans. I think we're talking an extremely limited 4 amount of people who've been before these -- your Boards 5 over and over and over. And those are the individuals 6 who, through their own efforts, wish to have the -- I 7 think there's a finite number of those individuals. 8 We're not talking hundreds of thousands or thousands of 9 vendors. And we're not talking gentlemen that make 30, 10 40, 50 -- we're not talking a lot of money. We're 11 talking enough money where these veterans have earned an 12 exemption by, uh -- by fighting in conflict. 13 MR. HORTON: Yeah, I would agree that the, 14 uh -- the matter is important. The numbers are 15 infinitesimal relative to the aggregate. Um, but the 16 challenge still remains the same. 17 Um, possibly -- and the challenge in trying to 18 give you direction, it's almost as if though we would be 19 giving you legal counsel. Um, but if there -- if one of 20 these cases were to somehow come before the Board and 21 the Board was to -- somehow was to deny it based on 22 existing law, and then it was to go to court, and the 23 court was to -- was to overturn the Board of 24 Equalization and disagree and say that, uh, the 25 interpretation was wrong -- and I'm just speculating. 26 I'm not an attorney, and I certainly don't want to 27 provide any legal advice. But, uh, I do know that the 28 Board of Equalization would have to follow the orders of 10 1 the court in such case. Um, and it would govern, even 2 supercede the legislature. 3 MR. CONNELL: And your group couldn't ask, say, 4 our Supreme Court to say, "Here's the law, what does it 5 mean?" You just couldn't ask them that question? 6 MR. HORTON: Um, the only body that -- that we 7 can ask is the AG, Attorney General. And we certainly 8 exhausted all of our, uh, avenues that we can go to. 9 The Supreme Court will not provide an advance 10 ruling of any decisions that they may make because it 11 would bias their ultimate decisions. And they are, much 12 like the Board, uh, hears of the facts. And so they 13 want to -- would not want to bias the case or deny 14 anyone their right to the process. So they wouldn't 15 issue a recommendation. 16 MR. CONNELL: Should I draw up a retroactive 17 bill that I can get introduced by the Senate or the 18 Assembly; should I do that? 19 MR. HORTON: I would agree with that. I mean I 20 would -- I would -- I would -- I would talk to the 21 leadership in the legislature and sort of quantify the 22 numbers that you're speaking of. 23 MR. CONNELL: You -- you guys would have the 24 numbers. I don't have those numbers. 25 MR. HORTON: Well, to the extent that that 26 information's available to the public, I'm sure we could 27 assist you. 28 MS. YEE: Yeah, I think -- Mr. Chairman. 11 1 MR. CONNELL: If you would do that, then I'd 2 start working on it so it could be introduced by next, 3 uh -- by next, uh, legislative cycle. 4 MS. YEE: Well, let me -- let me -- I have a 5 couple suggestions, Mr. Chairman, if I could. 6 MR. HORTON: Sure. 7 MS. YEE: Um, I think that is the only way that 8 we're going to be able to act as if we have statutory 9 authority to do that. So we'll need a bill. 10 Uh, I don't know whether you've begun, this 11 legislative session, to work with members of the 12 legislature. 13 MR. CONNELL: I have. I -- excuse me. I have 14 one of their assistants and legal aids right here. 15 MS. YEE: That's okay. But I -- I would 16 suggest, as the Chairman has suggested, speaking with 17 the leadership, and then also the Chairs of the 18 Veterans' Affairs Committee, um, Senator Correa and 19 Assembly Member Cook to see, uh, what the feasibility is 20 of having a bill that deals with the retroactivity. 21 It would have to be very narrowly drafted, and, 22 um, at this point the numbers don't really mean anything 23 if we don't know what the universe looks like. 24 MR. CONNELL: Right. 25 MS. YEE: So, that's what we need to refine. 26 Um, I think we attempted to do that in a prior attempt 27 and it's very, very difficult. 28 Um, but I -- I don't want to have you hear 12 1 empty promises here when there's no willingness up the 2 street to really take on the issue. 3 MR. CONNELL: Well, like I said before, 4 whatever door that I have to knock on, I will. And, uh, 5 if I have a little more work to do before I can see all 6 of my money returned and my other brother and sister 7 veterans get their money back, then I have a little more 8 work to do. 9 So, uh, I will see you somewhere down the road, 10 I'm certain. But I will once again thank you very much 11 for your time, your concern. 12 Uh, my feelings are that I think that, uh, if 13 you asked your Attorney General one more time about 14 this, and be specific with the 19 -- 1893 law, they 15 started with that, that eliminates all of the nonsense 16 about the commas, and the plain English then would 17 apply. I really do think that. Especially with the two 18 Senate Bills back-to-back that just have clarified the 19 1893 enactment. 20 I think if, uh -- you know, I know it will take 21 forever to come back. It was over two and a half years 22 the last time we asked them for something. But, uh, 23 Ms. Harris is as sharp as I think she is, I think she 24 would like to right the wrong. That's what I think. 25 MR. HORTON: Well, you're always certainly 26 welcome here. You have a, um, a very supportive, uh, 27 audience here; unfortunately, an audience that doesn't 28 have the authority to, um, address your concern. 13 1 And to the extent that, uh, we certainly can, 2 um, the process would have to start, I would say, either 3 in the courts or in the legislature. Um, even the AG, 4 um, opinion would probably be forged out of a bill going 5 to the legislative analyst's office, and they make 6 the -- draft the language of the bill and then move it 7 forward. That would be the -- the initial start, the 8 catalyst, I would say, for any subsequent 9 interpretations. 10 MR. CONNELL: I appreciate all your direction 11 and your kindness. And, uh, I want you to have a good 12 year and good health to all of you. 13 Thank you very much for your time. 14 MS. YEE: Thank you, Mr. Connell. 15 MR. HORTON: Thank you. 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 14 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 February 28, 2012 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 14 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: March 8, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 15