1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 MAY 30, 2012 9 10 ITEM I 11 TAX PROGRAM NONAPPEARANCE MATTERS 12 ITEM I3.1 13 LOCAL TAX REALLOCATION MATTERS 14 15 16 17 18 19 20 21 22 Reported by: Juli Price Jackson 23 No. CSR 5214 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 19 ---oOo--- 20 For the Staff: Trecia Nienow Tax Counsel IV 21 Legal Department 22 Robert Lambert Assistant Chief 23 Counsel 24 25 ---o0o--- 26 27 28 2 1 INDEX OF SPEAKERS 2 3 NAME PAGE 4 5 Albert Torrico 4 City of Fillmore 6 7 Robin Sturdivant 6 HdL Companies 8 9 ---o0o--- 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 MAY 30, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond, next item. 6 MS. RICHMOND: Our next item is item I.3, local 7 tax reallocation matters. 8 MR. HORTON: Okay. As the staff comes, we 9 would invite Mr. Torrico to testify. Over this way, 10 sir, (indicating). 11 Thank you very much. We would first take a 12 report from staff. 13 All we have -- let me make sure here. 14 Ms. Sturdi -- 15 MS. STURDIVANT: Sturdivant. 16 MR. HORTON: Sturdivant, you bet. 17 Okay, there we go. 18 All right, staff. 19 MS. NIENOW: Chairman Horton, Members, good 20 afternoon. Trecia Nienow from the Appeals Division. 21 This is a petition for rehearing that we 22 recommend be denied. 23 MR. HORTON: Okay. We would hear from 24 Mr. Torrico and then Miss Sturdivant. 25 ---o0o--- 26 ALBERTO TORRICO 27 ---o0o--- 28 MR. TORRICO: Thank you, Mr. Chairman -- I 4 1 wanted to make sure it was on. 2 Mr. Chairman, Members of the Board, good 3 afternoon. As you may recall from the very lengthy 4 hearing, original, when the case was brought forward, 5 there was a lot of discussion and a lot of, I think 6 confusion, about the actual operation in Fillmore. 7 And the decision, actually, reflects that 8 confusion. The summary of the issues remaining in the 9 case reflects, I think, further confusion. On page 6 10 there's a conclusory statement that the taxpayer did not 11 conduct any negotiations at the office, did not take 12 orders and that there were no activities at the Fillmore 13 office. That's page 6 of the Appeals Division petition 14 for rehearing summary. 15 Those are the kinds of factual ambiguities and 16 confusion, I think, have produced this -- this erroneous 17 result. 18 As a result, we have -- we have submitted two 19 affidavits. One, most pointedly, declaration of Joyce 20 Cooperman, which is under -- signed under penalty of 21 perjury, which do, in fact -- does, in fact, describe in 22 detail her activities in the office as it would pertain 23 to the sales and purchase of materials. 24 And we think that the consideration of the two 25 declarations taken together are due cause to reopen the 26 hearing and grant us a rehearing on this issue. 27 MR. HORTON: Okay. Testimony and staff -- in 28 support of staff's position. 5 1 ---o0o--- 2 ROBIN STURDIVANT 3 ---o0o--- 4 MS. STURDIVANT: Good afternoon, Mr. Chair. My 5 name is Robin Sturdivant with the HdL Companies. And we 6 represented the City of Burbank in these hearings and 7 participated from the beginning all of the way through. 8 And the City of Fillmore had ample opportunity 9 to provide any additional evidence throughout the 10 process. What they provided with their request for 11 rehearing wouldn't qualify as evidence that would change 12 the outcome in the case. 13 So, we urge you to go with the staff 14 recommendation. Thank you. 15 MR. HORTON: Okay. Discussion, Members? 16 Member Steel. 17 MS. STEEL: No. 18 MR. HORTON: No? 19 MR. RUNNER: You know -- 20 MR. HORTON: Member Runner. 21 MR. RUNNER: -- I'm just -- I got some new 22 notes here I'm trying to get through here. 23 I guess the question I have is whether or not 24 then the language that came out -- the Appellate Court 25 decision last week, you know, leads any credence to 26 the -- to the issue of a rehearing. 27 And I guess I'd like to hear staff's opinion on 28 that. 6 1 MS. NIENOW: Robert Lambert from our Litigation 2 Division is here and he -- he can address that. 3 MR. HORTON: Looks like we might need another 4 chair, Members. Okay. 5 MR. LAMBERT: Good afternoon. That's a matter 6 of pending litigation, which we can not discuss in 7 public. But the appeal is preceding on on the one issue 8 which has to do with what type of a writ would be 9 appropriate for review of a pre-regulation hearing. 10 So, this, as I understand it, was done after 11 the regulation. So, I'm not sure it has any bearing on 12 it. 13 Beyond that I would hate to discuss too much 14 publicly on a pending litigation matter. 15 MR. RUNNER: Let me -- let me just clarify. 16 Isn't the -- I guess I am reading from some excerpts 17 from the Appellate Court decision of last week. 18 MR. LAMBERT: That's not an Appellate Court 19 decision in the normal sense. That's an order on a 20 motion to dismiss the appeal brought by the parties, 21 which the Board did not participate in, to dismiss it 22 based on the -- a settlement they had, which the Court 23 declined to approved based on public policy reasons. 24 It's not an appellate decision in that sense. 25 MR. RUNNER: Okay. 26 MR. LAMBERT: The case precedes it. 27 MR. RUNNER: Okay, okay. So, that's why it is 28 that your phrasing was, "It's still in litigation." 7 1 MR. LAMBERT: Yeah, that's true. 2 The appeal on the one issue under appeal is 3 still pending. This was the attempt to settle it by the 4 parties, which failed thus far. 5 MR. RUNNER: Okay, thank you. 6 MR. LAMBERT: Thank you. 7 MR. HORTON: Further discussion, Members? 8 Is there a motion? 9 MR. RUNNER: I'd move to grant rehearing. 10 MR. HORTON: Moved -- motion by Member Runner 11 to grant the rehearing. 12 Is there a second, Members? 13 MS. STEEL: Second. 14 MR. HORTON: Second by Member Steel. 15 Any objection? Hearing none, such will be the 16 order. 17 ---o0o--- 18 19 20 21 22 23 24 25 26 27 28 8 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 MAY 30, 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 8 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: JULY 11, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 9