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 JULY 25, 2012 9 10 11 12 13 14 15 16 17 18 19 Reported by: Juli Price Jackson 20 No. CSR 5214 21 22 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 the Department: David Gau Deputy Director 19 Property and Special Taxes Department 20 21 ---oOo--- 22 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JULY 25, 2012 4 ---oOo--- 5 MR. GAU: Okay. My last item for this 6 afternoon is a discussion -- I just wanted to provide 7 you an update on the implementation of the Fire 8 Prevention Fee Program. 9 As you're aware, last year AB 29, from the 10 first ordinary session, authorized a new State 11 Responsibility Fire Prevention Fee, to be assessed on 12 habitable structures located within the State 13 Responsibility Areas, or what they are known as SRAs and 14 the revenues to pay for fire prevention services within 15 those SRAs. The Board is required to annually assess 16 and collect this fee on behalf of the Department of 17 Forestry and Fire Protection, or CalFire. 18 One item I'll note at the outset is that we 19 have been working on a brochure with CalFire and that 20 will be included with our billing. And we've been 21 working -- able to work through and resolve those 22 issues. And it will be included with our billing. And 23 I'll describe a little bit more on that in a moment. 24 To date we've uploaded about 827,000 feepayer 25 names and addresses that were identified by CalFire as 26 owing the fire prevention fee into our registration 27 system. Included with CalFire's listing is the amount 28 that -- of the fire prevention fee that is owed and the 3 1 applicable credits that may be allowed on the habitable 2 structures for those feepayers who are within the 3 boundaries of a local fire protection agency. 4 As many -- as you're aware, we've also 5 provided -- we're anticipating an additional outreach 6 effort. We're going to mail notices -- advance notices 7 we're calling them -- prior to the feepayers receiving 8 our billings. Many of these feepayers are receiving the 9 fire -- that are receiving this fire fee billing, they 10 live in rural areas where mail is not delivered to their 11 homes. They typically have to go to maybe a post office 12 box. And also, since this is a new fee program, we're 13 committed to providing as much advance notice and 14 information regarding the Fire Prevention Fee Program. 15 And we -- we do believe that it will be of 16 great benefit to the feepayers and, ultimately, will 17 result in better compliance. 18 In addition to the advance notice, we plan on 19 utilizing our website as another means of reaching out 20 to the feepayers regarding the new fee. 21 The mailing schedule will be posted on our fire 22 prevention fee web page and updated frequently in 23 advance of billings going out to the feepayers by 24 county. 25 So, the billings will be generated and mailed 26 out in county alphabetical order for the fiscal '11-'12 27 year. And these are going start going out in 28 mid-August. Initially CalFire wants a slower start with 4 1 4,000 billings -- billings per day going out the first 2 two weeks, in order for them to react to some of the 3 phone calls they may get, see what their -- anticipate 4 those being. And then we'll ramp up to about 10,000 5 billings going out on each day. 6 So, based on the volumes of feepayers we have 7 and those mailing amounts -- daily mailings, we 8 anticipate that '11-'12 will be done by early December. 9 The bill itself identifies the fee, provides 10 instructions about how to remit their payment and also 11 how to petition the fee, should feepayers wish to do so. 12 And then, as I mentioned at the outset, CalFire 13 has produced an informational brochure that will be 14 included with our billings. The layout of the brochure 15 is in a question and answer format, providing general 16 information about the Fire Prevention Fee Program. And 17 then it also includes links and other contact 18 information, should the feepayer require additional 19 information. 20 And then, so, you're also aware, that in 21 January of 2013, we will get another list from CalFire. 22 And those will be for '12-'13 fee billings. The '12-'13 23 fee billings will be mailed out on or after March 1st of 24 2013. The '12-'13 ones -- billings will also go out in 25 alphabetical order by county. 26 So, this fiscal year, because the timeline for 27 implementation, should be the only time that feepayers 28 do receive a billing -- two billings within the same 5 1 fiscal year -- one for '11-'12, one for '12-'13. 2 Thereafter, they will receive only one billing per year. 3 At this time I'd be happy to answer any 4 questions the Members may have. 5 MR. HORTON: Member Steel. 6 MS. STEEL: This so-called fee is an 7 unconstitutional tax that I believe and it's an illegal 8 tax, but I have little concern that after I look at the 9 brochure that -- how we going to identify the -- this 10 fee taxpayer that if they're renting that house, then 11 how you going to collect it? 12 And seems like they have to contact BOE instead 13 of CalFire, that even CalFire is responsible to contact 14 those people. 15 So, that's only concern I have. 16 MR. GAU: Okay. So, if they're renting 17 properties -- CalFire has identified for -- to us these 18 feepayers through their work with the County Assessors' 19 offices. And, so, what they've identified are the 20 property owners. 21 So, if -- if the property owner's mailing 22 address may be different than the property itself, that 23 could be an issue as far as a renter. They have a 24 triple 8 number that is going to be their call center. 25 And that is a question that I would certainly relay 26 along to the CalFire staff to be aware of. 27 MR. HORTON: Further discussion, Members? 28 Yes, Mr. Runner. 6 1 MR. RUNNER: Yeah, first of all, I -- I -- I 2 have great challenges with the whole fee tax issue 3 anyhow. I think it's going to be a challenged issue 4 once we get into this process and realize that, at this 5 point, we are just administerially involved in that 6 process. 7 And, so, first of all, I want to thank Mr. Gau 8 and Special Taxes and Legal for really taking a hard 9 look at some of this issue because again the complexity 10 of this issue between us doing the collection process, 11 CalFire doing some of the administration, them actually 12 subbing out the -- their hotline, I guess, if you will, 13 and the follow-up, if indeed, there's discussions about 14 whether it's -- if somebody's in an SRA or not -- makes 15 this a pretty complex issue. 16 And I thought it was important for us to give 17 as much notice to taxpayers as possible because the 18 reality is the way it was first brought to us, the fact 19 is, somebody could get this notice and in 20 -- 15 days 20 have something due. 21 And, again, you're thinking about some of these 22 individuals all of a sudden could be on fixed incomes in 23 the hills somewhere and they get a bill for at least 24 150, but if they have a house and a trailer in the back, 25 it's $300, and they've got to figure out how to pay that 26 next month. And, so, I was real concerned about that 27 process. 28 So, I think the pre-notice, at least, is a 7 1 helpful tool that we had control over. And I think that 2 was a good thought. And I appreciate the -- the concern 3 in regards to that. 4 I do think this is going to be a very 5 controversial program. I, at this point, have about 6 half of them in my district. And, so, I am a little 7 publicly more sensitive to this than if I had just 8 mostly LA, but -- 9 MR. HORTON: I've a got few. 10 MR. RUNNER: -- you've got a few. So -- so, we 11 know this is going to be an issue. 12 And I'm at least confident to know that we can 13 at least let them know that the BOE did all we could do 14 to insure that there was a smooth implementation. 15 Now as to the underlying tax issue and whatnot, 16 you know, I think some of us will be engaging 17 differently in regards to that particular issue. But 18 right now I think our administerial job, at least, has 19 been done in a thoughtful way, given the very limited 20 timetable that they gave us for implementation. 21 So, thanks. 22 MR. HORTON: Yeah, I too want to add my 23 appreciation for the proactive leadership and 24 particularly in a couple of areas -- one, delineating 25 the responsibility and believe that we should continue 26 to do that. It's going to be an ongoing task for the 27 purpose of compliance to insure that the taxpayer or 28 feepayer, however it is ultimately viewed by 8 1 individuals, knows exactly where they need to go in 2 order to address their concerns. The other is early 3 notification on our part to insure that the taxpayers 4 that are mostly in Mr. Runner's district -- just kidding 5 -- to insure that the taxpayers are made -- Mr. Runner 6 and Marcy's district, by the way -- 7 MS. MANDEL: They're all in our district. 8 MR. RUNNER: That's right. 9 MR. HORTON: -- yeah, I thought I'd help out a 10 little bit there -- are made aware in advance of the 11 payment being in a new -- a new program and the 12 transparency that we've created in this whole process. 13 As well I want to thank the Governor's office 14 for their cooperation in bringing the two together, the 15 Board of Equalization and CalFire, in order to bring 16 some resolution to the Board of Equalization's concerns. 17 Thank you for your presentation. And we 18 certainly appreciate it, thank you. 19 MR. GAU: Thank you. 20 ---o0o--- 21 22 23 24 25 26 27 28 9 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 JULY 25, 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 9 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: AUGUST 28, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 10