1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 APRIL 26, 2012 9 10 ITEM P OTHER ADMINISTRATIVE MATTERS 11 ITEM P1 -- EXECUTIVE DIRECTOR'S REPORT 12 ITEM P.1.1 -- CROS PROJECT UPDATE AND ACTIONS 13 14 15 16 17 18 19 20 21 Reported by: Juli Price Jackson 22 No. CSR 5214 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 Joann Richmond Chief, Board 16 Proceedings Division 17 18 For Staff: Eric Steen Director 19 CROS Project 20 21 ---oOo--- 22 23 24 25 26 27 28 2 1 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 APRIL 26, 2012 5 ---oOo--- 6 MS. RICHMOND: Our next item is P1.1, CROS 7 Project update and actions. 8 MR. HORTON: Members, this is a report on the 9 CROS update. 10 Mr. Steen, would you please commence when you 11 are -- 12 MS. STEEL: I need -- 13 MR. HORTON: Mr. Steen. 14 MR. STEEN: Mr. Chairman, Honorable Members, 15 Eric Steen, Project Director of Centralized Revenue 16 Opportunity System. 17 My privilege to provide you an update today on 18 the CROS project. I'll briefly address issues 19 pertaining to the schedule, budget, some progress we're 20 making and communication that's being undertaken on 21 behalf of the project. 22 I'm pleased to report that the schedule for the 23 Request for Proposal stands at 76 percent complete. And 24 we are on target to deliver a draft, which is really an 25 RFI, in July of this year. In fact, we'll submit four 26 of the nine sections of the RFP to the Department of 27 General Services by the end of this month. 28 I have some good news to report pertaining to 3 1 the Budget Change Proposal. We submitted a -- sorry, we 2 submitted -- what did we submit? We submitted an SPR, 3 Special Project Report, I'm sorry, Special Project 4 Report March 23rd to the California Technology Agency, 5 which really highlights the differences, the change in 6 our approach from what's in the feasibility study 7 report. I'm pleased to report that the California 8 Technology Agency approved of the SPR. 9 And as a result of their approval of the SPR, 10 the Department of Finance has approved our Budget Change 11 Proposal. 12 So, in the coming days we expect to receive a 13 formal written approval of the BCP from the Department 14 of Finance. 15 Following this, of course, it's taken up by the 16 legislature. And there is some hearings in early May 17 where we will represent the BCP. Hopefully, it's 18 approved there and it will provide the budget we need to 19 move forward on the procurement and related initiatives. 20 So, that's good news. 21 I'd like to also highlight a couple of areas of 22 progress that the project is making. One of the things 23 we're doing is building an environment to work with IRS 24 data, and that's known as federal tax information. 25 There are a lot of stringent requirements that the IRS 26 imposes on the use of their data. And, so, we met with 27 the IRS and we met with Franchise Tax Board seeking 28 their assistance, as they have done this in the past. 4 1 And they actually commended us on doing this now. When 2 they did it they were 30 percent into the 3 implementation. So, they very much applauded our 4 efforts in getting ahead of this, as it takes a lot of 5 time to do. 6 We're also -- we've also built a web 7 application to manage information exchange. And we're 8 using it internally to track all of the inbound and 9 outbound data. 10 There was a question earlier pertaining to the 11 data that -- that Customs provides the Board of 12 Equalization. It's that kind of information that this 13 web application would track. And we'll use it for the 14 project, but we see tremendous benefit for the 15 enterprise as well. 16 And we're hoping -- we're hoping to actually 17 produce some data quality reports by July, which will, 18 of course, we will use to cleanse and synthesize the 19 data that will ultimately go into the new system. 20 Just a couple more items on communication, what 21 we're doing to communicate the project. We've conducted 22 a review of the proposed CROS solution with the steering 23 committee, which is primarily made up of Department 24 heads and they have -- they've approved the vision. 25 That, of course, goes into the RFP. 26 We will present a CROS update to the PSTD 27 supervisors and managers in mid-May. And there was 28 also, as you know, I believe, an article on Techwire.net 5 1 highlighting CROS. 2 This ends my report. 3 If there's any other questions, I would be 4 happy to answer them. 5 MR. HORTON: Discussion, Members? 6 Member Yee. 7 MS. YEE: Just congratulations to the staff on 8 the approval of the Budget Change Proposal. 9 MR. STEEN: Thank you. 10 MS. YEE: It's a major milestone. 11 MR. STEEN: Yes, it is. Thank you very much. 12 MR. HORTON: I echo those congratulations and 13 certainly encourage staff to deal with the revenue lift 14 issues to assure that we're able to articulate to the 15 legislature the financial benefits of CROS, which I 16 believe is there. 17 MR. STEEN: Absolutely. 18 MR. HORTON: Further discussion, Members? 19 Hearing none, thank you so much. 20 ---o0o--- 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, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 APRIL 26, 2012 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 6 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: MAY 18, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 7