1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 OCTOBER 23, 2012 10 11 12 13 14 OTHER ADMINISTRATIVE MATTERS 15 ITEM P5 ADMINISTRATION DEPUTY DIRECTOR'S REPORT 16 1. 2012/13 BUDGET UPDATE 17 2. LEGISLATIVE BUDGET CHANGE PROPOSALS 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 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief Board Proceedings Division 16 17 18 For Board of Equalization Staff: Liz Houser 19 Deputy Director Administration 20 21 Randy Ferris Chief Counsel 22 Legal Department 23 24 ---oOo--- 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 OCTOBER 23, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: Our next item is P5, 7 Administration Deputy Director's Report, P5.1, 2012/13 8 Budget Update. 9 MR. HORTON: Welcome, Ms. Houser. 10 MS. HOUSER: Good afternoon, Chairman Horton 11 and Members. I'm Liz Houser, Deputy Director for 12 Administration. 13 I do not have any new updates on the '12/'13 14 budget, so I'd like to move on forward to item P5.2. 15 As directed by the Board, I request your 16 approval of two 2012/13 Legislative Budget Change 17 Proposals. 18 AB 1492 imposes an assessment on a person who 19 purchases lumber products for storage, use, or other 20 consumption in this state. This bill was chaptered on 21 September 11th, 2012 and mandates the BOE to administer 22 and collect the lumber products assessment. In order to 23 comply, BOE must program information systems and web 24 applications to accommodate various -- changes to the 25 various returns, revenue, audit and accounting 26 subsystems. 27 The BOE received $1.92 million and 13.3 28 positions to fund the implementation in the '12/'13 3 1 Budget Act. At that time the proposal contemplated the 2 tax on the retail sale of lumber products as an 3 additional sales tax to be imposed and administered in 4 the same manner as the California sales and use tax law. 5 However, AB 1492 was later amended to incorporate an 6 assessment on lumber using a different approach, which 7 has created an additional workload not addressed in the 8 original funding request. 9 This BCP addresses the Public Resource Code 10 provisions that were added, whereby the BOE must fully 11 implement and enforce the one percent assessment 12 collection obligation imposed on retailers and 13 purchases -- purchasers, as well as established by 14 emergency regulation the amount of retail reimbursement 15 for collection costs and account for that in our return 16 processing by January 1st, 2013. 17 The BCP requests an additional four positions 18 and 955,000 in fiscal year '12-'13 dropping to 656,000 19 in fiscal year '13-'14 and 571,000 in '14-'15 and 20 ongoing. 21 Are there any questions on this BCP? 22 MR. HORTON: Members? 23 MR. RUNNER: Yeah, let me just, a quick 24 explanation. 25 MR. HORTON: Mr. Runner. 26 MR. RUNNER: Um, we should do this. We should 27 be -- we should be reimbursement for the cost of 28 implementing this. But, as it comes before me today, 4 1 I can't vote for it, uh, not out of the issue that we 2 shouldn't be reimbursed. But I just cannot, right now, 3 vote for us to become fully reimbursed for our cost for 4 implementing the legislation at the same time we 5 knowingly are not reimbursing the -- the -- the folks 6 that are actually doing the collection, the folks that 7 are actually collecting for us. 8 So, we should -- we should get it, just like 9 those retailers should get it. But today, I just cannot 10 support the idea of not -- of us getting our fully 11 reimbursement, but retailers who are collecting this tax 12 for the State of California not. 13 MS. HOUSER: Thank you, Mr. Runner. 14 MR. HORTON: Further discussion, Members? 15 MS. YEE: Are you entertaining a motion? 16 MR. HORTON: Under the circumstances, we 17 will -- 18 Is there a motion, Members? 19 MS. YEE: Move approval of the BCP. 20 MR. HORTON: Move approval of the BCP by Member 21 Yee. Second by Member Mandel. 22 Without objection -- objection noted. 23 MS. STEEL: Objection. 24 MR. RUNNER: Objection. 25 MR. HORTON: Ms. Richmond, please call -- 26 MR. RUNNER: He was just moving too fast. 27 MR. HORTON: -- the roll. 28 MS. RICHMOND: Mr. Horton. 5 1 MR. HORTON: Aye. 2 MS. RICHMOND: Ms. Steel. 3 MS. STEEL: No. 4 MS. RICHMOND: Mr. Runner. 5 MR. RUNNER: No. 6 MS. RICHMOND: Ms. Yee. 7 MS. YEE: Aye. 8 MS. RICHMOND: Ms. Mandel. 9 MS. MANDEL: Aye. 10 MS. RICHMOND: Motion carries. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 1 MS. HOUSER: My next item is AB 2323 which was 2 signed by the governor on September 9th, 2012 and adds 3 Section 40 to the Revenue and Taxation Code, effective 4 January 1, 2013, requiring the BOE to publish on its 5 Internet website a formal written opinion, a written 6 memorandum opinion, or a written summary decision for 7 each decision of the BOE in which the amount of 8 controversy is 500,000 or more within 120 days of the 9 date upon which the BOE rendered its decision. 10 This -- the BCP requesting resources to perform 11 this workload was returned by the Department of Finance 12 without consideration as it did not meet their criteria 13 outlined in Budget Letter 12-15 which includes statutory 14 changes necessary for departments to manage with their 15 budgets, governor's reorganization plans, existing or 16 ongoing information technology or capital outlay 17 projects, cost-cutting measures, or improved budgeting 18 practices. 19 Our Chief Counsel, Randy Ferris, will discuss 20 the Board's options and response to Finance's actions. 21 MR. HORTON: Sir. 22 MR. FERRIS: Uh, the, uh, refusal of Department 23 of Finance to consider the -- the BCP request, um, 24 basically, you know, calls into question, uh, some -- 25 some broader questions about what the intent of the bill 26 actually was. 27 I know when the language first came out, uh, in 28 BOE Legal we thought this is -- this seems like a big 7 1 deal to us. And -- and -- and, in part, based on our 2 experience with some -- some of the, uh, larger 3 franchise and income tax matters where sometimes the 4 hearing, you know, could last hours and, uh, new legal 5 theories, new evidence, new testimony, other things like 6 that, you, know in order to -- to really deal 7 appropriately with the transcript and what happened in 8 the Board hearing, we saw that the -- the bill requiring 9 something that -- that could require substantial amounts 10 of attorney time in order to -- to do the kind of 11 excellent legal work and to provide the kind of 12 excellent memorandum opinions. Or even if it was a 13 non-precedential summary decision, uh, just in terms of 14 our own integrity as an agency and -- and the kind of 15 legal work we want to do in the Legal Department, we 16 felt like it was, uh, indicating a significant and new 17 workload for us. And without resources, might cause us 18 to have to redirect staff that could delay other 19 appeals, resulting in interest accrual, other things 20 like that. 21 When -- when I would have conversations with, 22 uh -- uh, folk over at the Legislature about this, they 23 would, uh, look at me like they didn't understand what I 24 was saying, uh, that the-- that the concerns and the 25 perspective weren't, uh, legitimate from their point of 26 view. 27 They would indicate that they viewed this as 28 primarily a ministerial, uh, bill. Uh, that, uh, since, 8 1 you know, many documents -- hearing summaries, decisions 2 and recommendations -- are prepared in advance of the 3 hearing, uh, from their perspective it, uh, could be 4 handled by cutting and pasting and adding a little more, 5 uh, interstitial language just to tie it all together 6 and it could be done very quickly; uh, and therefore, 7 they didn't view it as being a new and substantial 8 workload for the Legal Department. 9 Uh, when they would say things like that, I 10 would encourage them to clarify that in the legislation, 11 because that's not the way we were understanding the 12 intent behind the bill. 13 Uh, you know, ultimately we did provide, uh, 14 some detailed costing information to Senate 15 Appropriations. That material did go out to Board 16 review before we released it to Senate Appropriations. 17 They seemed to accept the numbers as being, uh, 18 legitimate; there was no question of it, and it just 19 kind of went through. 20 But I think what we're seeing uh, from 21 Department of Finance is that whatever the governor 22 thought about it, he didn't, uh -- he didn't think that 23 it would -- uh, when he signed it, that it would, uh, 24 cause there to be a significant and new workload for -- 25 for BOE. 26 And, uh, this -- this may, uh, provide some 27 kind of public evidence for a more ministerial, uh, 28 impact and interpretation of what the -- what the bill 9 1 is actually, uh, trying to accomplish. So that may -- 2 so options are would be, you know, to, uh -- if the 3 Board were to direct us to seek to get Department of 4 Finance to reconsider, we can certainly do that. I -- I 5 can't offer you, uh -- any kind of odds on how likely it 6 would be that they would give us the positions. 7 Um, the other thing would be in -- probably in 8 December we are planning on coming before you with a, 9 uh -- a, uh, Chief Counsel Memorandum that will lay out, 10 you know, in light of this new information, at least 11 about how the administration views this bill; what our 12 options are to make sure that, one, we maintain the 13 integrity of our appeals process, that no taxpayer's 14 appeals are delayed in any way, shape or form because of 15 AB 2323; uh, that we do, uh, comply with the letter of 16 the law that is, uh -- that is there. 17 And, uh, particularly, uh, with respect -- I 18 think the -- the most pressing issue is how to interpret 19 the -- the phrase "amount in controversy." And, uh, we 20 will, uh, come -- be coming forward with our, uh -- our 21 own recommendation with respect to how to measure that 22 amount in controversy, but we will certainly be seeking 23 Board input and direction on that. 24 MS. YEE: Okay. Question. 25 MR. HORTON: Uh, discussion, Member Yee. 26 MS. YEE: Thank you, Mr. Chairman. 27 Thank you, Mr. Ferris, for the feedback. 28 Um, on the one hand it's a little bit of a 10 1 relief, um, to hear that we may not be saddled with a 2 workload. On the other hand, um, to the extent that the 3 whole thrust of the bill was really to, I thought, have 4 this Board provide additional guidance, uh, with respect 5 to decisions that we, uh, make, and almost may have the 6 unintended consequence of where everything becomes a 7 summary decision. 8 Uh, but having said that, um, I wanted to just 9 suggest that perhaps we can use the, uh, rules for tax 10 appeals to clarify what the expectations are going to be 11 going forward, just so it's memorialized somewhere if 12 the Legislature should want to revisit this issue, and 13 we are clear about how we're going to implement the 14 provisions of 2323. 15 MS. MANDEL: Question. 16 MR. HORTON: Uh, Member Mandel. 17 MS. MANDEL: Um, I guess I had understood -- I 18 had understood the Finance action sort of as a more 19 technical thing with respect to the budget process, as 20 opposed to necessarily be some sort of -- um -- um, 21 judgment on the substance of the bill requirements and 22 what it might impose. 23 I thought it was a more technical thing about 24 what they asked for in their Budget Letter that maybe I 25 misunderstood to be related somehow to revenue-type 26 issues. But maybe I -- 27 MR. FERRIS: Yeah. I mean, it appears that one 28 basis for them to approve it is statutory changes 11 1 necessary for departments to manage within their 2 budgets. And I think the -- the implication is that 3 they don't -- they view this as not something that -- 4 that, uh -- 5 MS. MANDEL: Maybe they just think we have 6 enough resources and that we can rearrange or something. 7 Not necessarily that they think that the bill itself 8 won't require you to do a different -- 9 I mean, you may be -- it may be that Legal's 10 over thinking what has to go into the whole thing when 11 they write something. It may be, you know, that you've 12 been over thinking. I don't know. 13 But it may be that what Finance is thinking is 14 that we have a big legal department and this isn't much, 15 can't you figure out how to deal with life? 16 I don't -- I don't know that I take Finance -- 17 I mean, I don't play in much of these budget things, but 18 I don't know that it's a -- necessarily at this level a 19 judgment from -- from, um, Finance that you -- that -- 20 that whatever you're thinking doesn't really require a 21 lot of work, as opposed to, you know, we don't want to 22 fund it this way or it doesn't meet our -- it doesn't 23 meet our funding standards somehow. As opposed to what 24 I hear you saying, which almost sounds more like a 25 substantive judgment by Finance on the substantive work 26 itself. 27 MR. FERRIS: Uh, if -- if I said anything that 28 wasn't carefully modulated and overstate -- I thought I 12 1 was pretty careful on how I said what I said. But what 2 I intended to say -- 3 MS. MANDEL: Well, then my ears are -- 4 MR. FERRIS: Uh, like I said, from the very 5 beginning, folks that were in the Legislature that were 6 supportive of the bill would, uh, respond to me when I 7 said this is a significant and -- and new workload for 8 us. They would respond to me like, that's not true. 9 You know, that's not what we're asking you to do. They 10 would respond like it was primarily ministerial; cutting 11 and pasting a few interstitial sentences, you're good to 12 go, you've got your legal opinion. And you've already 13 done all the work, that's all that needs to be done. 14 And so, all I was trying to say is that the 15 governor signing it and then having Department of 16 Finance not provide us the positions is indicative, 17 perhaps, and certainly would be congruent with that way 18 of thinking about what the bill was about. 19 That's all I was trying to, um -- to suggest. 20 But there has been a lot of blow-back to me whenever I 21 would raise these types of concerns that my concerns 22 were not justified and that it wasn't intended to be a 23 new workload. 24 MS. YEE: Mm-hmm. Yeah. I think our 25 collective numerous attempts when we've raised those 26 concerns -- yeah. 27 MS. MANDEL: And the -- and the BCP itself, 28 you're saying this was consistent with what was in the 13 1 bill analysis and what was explained at Approps. 2 MR. FERRIS: At Senate Approps., yes. 3 MR. HORTON: Yeah. 4 MR. FERRIS: Uh, it's just -- it's one month 5 less, so there's a slight difference in the -- in the 6 overall. But it's -- it's a hundred percent consistent 7 with -- with the figures we gave to Senate Approps. 8 MS. HOUSER: Yeah, the BCP actually requested 9 $24,000 less than was identified through the Leg. 10 analysis in the first year only, because the Leg. 11 analysis contemplated, um, a start day for our staff of 12 October 1st. 13 MS. MANDEL: Mm-hmm. 14 MS. HOUSER: Uh, but by the time things got 15 signed and to us the BCP contemplated a November 1st 16 start date. 17 MS. MANDEL: Okay. And this is -- I mean, this 18 is a Legislative BCP, so this is kind of a -- I mean, 19 just like the last one, but it's kind of a new thing. 20 Because Legislative BCPs just go over within 10 days and 21 you would normally do whatever you'd normally do in our 22 budget shop. This is the first time that they're 23 actually coming like this in front of the Board, right? 24 MS. HOUSER: Correct. This was a change in 25 procedure. The Board requested, um, last year when we 26 went over the BCP process, um, and the Board had asked 27 that, from now on, Legislative BCPs are brought back to 28 the Board, with a full understanding that we have the 14 1 10-day -- 10-calendar-day statute that we must get them 2 to Finance. 3 So like the case with this one, we've already 4 received it back from Finance before we -- due to the 5 timing, before we had the opportunity to bring it 6 formally before the Board. 7 MS. MANDEL: Right. But -- and in the past, if 8 this had happened, you would normally do something. 9 MS. HOUSER: Normally we would -- we would 10 circle back with the Executive Director and executive 11 team to determine, uh, you know, what we were hearing 12 from Finance, to determine if it was, uh, something that 13 we'd want to go ahead and pursue an appeal. 14 On our standard BCPs, those have been approved 15 by the Board. So I always appeal those because the 16 Board has given me direction to move forward and secure 17 those resources. But these are BCPs that are in a 18 little different category. So our -- if it -- if we had 19 the opportunity under these to come back to the Board 20 before the appeal process expired, the timeline -- and 21 we do have on this one -- then we could ask for Board 22 direction on this. But typically we would -- this would 23 be something we would discuss with the executive team 24 and, depending on Board timing, bring it to the Board. 25 MR. HORTON: Further discussion, Members? 26 Members, I asked the, um -- the executive team 27 to bring this before us for a number of reasons. One, 28 to assure that we'd get clarification from the body 15 1 relative to the policy surrounding this particular 2 issue. Clearly there is, um, different perspectives as 3 to what the legislation actually meant. 4 Um, as -- as, you know -- as most of you know, 5 I opposed the legislation. And, quite frankly, if I 6 thought it was administerial, I would have supported it. 7 Um, I would have been a hundred percent supportive of 8 it. 9 In fact, I believe we had -- we had offered 10 amendments to -- that would have made it more 11 administerial in nature. Um, those amendments were 12 rejected. And so what we have is legislation that went 13 forth that had a, uh -- a half-a-million-dollar cost 14 factor in it, uh, that presumably anticipated that we 15 would, uh, do more work -- a more thorough analysis of 16 the, um -- of the issues being deliberated from the 17 beginning, uh, to the end of the process, which would 18 include the hearing process and any discussions or new 19 information or new facts that was developed or, uh, 20 evolved in that particular process. Which is important, 21 I believe, to the overall intent of the legislation is 22 to provide some guidance to -- as articulated by the 23 author and so forth, is to provide some guidance, some 24 additional guidance to the taxpayer. 25 We certainly can't accomplish that objective if 26 we don't incorporate the deliberations during the 27 hearing process and any subsequent activity that may 28 have taken place, all of which, from a holistic 16 1 perspective, is important to subsequent discussions or 2 value as it relates to the publishing of the document. 3 In fact, I actually thought that we should come 4 as close to, uh, creating something that could be 5 precedential as we possibly could. Uh, and that was the 6 intent of the legislation, and that was what the 7 Legislature voted on, a bill that incorporated a 8 half-a-million-dollar costs to accomplish that 9 objective. That is what the governor signed, a bill 10 that incorporated a half-a-million-dollar cost to 11 accomplish that objective. 12 And even though I opposed the legislation, I 13 support democracy; meaning that the majority -- I mean, 14 the Legislature has spoken, and what I hear them saying 15 is they want us to implement this law to the fullest 16 extent possible. And that would be my position, uh, and 17 I sup -- I opposed the legislation when it was going 18 through the process, but I support democracy. 19 Therefore, it is now law, and I feel bound to do 20 everything humanly possible to implement that law to the 21 fullest extent possible. 22 So, um, I think it's important that we get some 23 clarities from -- if -- if -- if necessary, um, that 24 it -- if it's the intent of the governor -- if we're 25 interpreting the intent of the governor to have this be 26 an administerial function, uh, then that needs to be 27 clarified. Because, uh, at the end of the day, if we do 28 so, I would imagine that there are those who supported 17 1 the legislation who will see it differently and 2 ultimately say the Board of Equalization is not 3 complying with the law. 4 And so, my position, uh, subsequent to the 5 passage of the law is to comply with the law to its 6 fullest degree possible. Uh, that means to the extent 7 that we can provide -- to the fullest extent that we can 8 provide transparency, awareness, and assessment and 9 evaluation and -- of the process, the issues, a point of 10 litigation, the fact patterns, the discussions, 11 subsequent discussion for the purpose of clarity and 12 transparency, that's what we should do; even if, uh, 13 ultimately we end up having to absorb that cost and the 14 State ends up losing revenue on the backside of this 15 transaction as a result of delay elsewhere, so be it. 16 But this is the law. That's a decision that 17 has been made, from my perspective. However, we should 18 certainly -- in my opinion, we should appeal this. And 19 we should offer up to the administration options. If 20 they in fact want this to be administerial in nature, in 21 here, we can certainly absorb that. If they want 22 this -- and if I could draw and an analogy, if they want 23 a Cadillac, we're prepared to give them that. If they 24 want a Volkswagen and that's their interpretation, uh, 25 there may some of us willing to -- to provide that as 26 well. 27 Uh, at this point I'm not prepared to give a 28 Volkswagen. I think the interpretation was full -- uh, 18 1 for us to provide the maximum transparency, the maximum 2 disclosure of all the issues and not the administrative 3 issues that we traditionally drill down on and disclose 4 in our normal process. 5 Because then, if we do that, then it goes back 6 to the -- the premise of our original argument was, is 7 that this bill does absolutely nothing. Is that, in 8 fact, we currently accomplish those objectives of 9 publicizing what happens administratively. Uh, we 10 accomplish those objectives. 11 So, presumably the Legislature didn't ask -- is 12 not asking us to be redundant and do what we've done, 13 uh, historically. They're asking us to do something 14 different, and this is amounting to an unfunded mandate. 15 In any other world an unfunded mandate wouldn't happen. 16 But this is not any other world. 17 So, that's just one person's -- one Member's 18 opinion on how we should proceed. 19 Further discussion, Members? 20 MS. YEE: Mr. Chairman, are you suggesting that 21 we pursue the appeal? 22 MR. HORTON: Yes. 23 MS. YEE: Okay. 24 MR. HORTON: But in a pursuing the appeal, I 25 think we have to -- Members, I think we have to clearly 26 delineate the options before the administration. And if 27 in fact the administration -- which they probably will, 28 uh, not respond at all, but at least it's out there. 19 1 And -- and -- and I would agree with you, uh, 2 Member Yee, that we should establish a process that 3 allows us to debate this, uh, publicly as we move 4 forward, just to -- to make sure we cover our assets as 5 far as public opinion is concerned. Uh, my -- and, 6 again, I want to be clear about mine; I believe in 7 democracy, and I think we need the Cadillac version with 8 the maximum amount of -- of, uh, disclosure and 9 transparency. 10 MS. YEE: Mm-hmm. Okay. 11 MR. RUNNER: Just -- just a quick observation, 12 though. Within the bill there are -- there are some -- 13 there are some, uh -- there's some latitude. Um, and so 14 some of our issue may be driven in regards to what we 15 can do and what we would do, what we would spend money 16 on and what we wouldn't. 17 For instance, we can choose to do more summary 18 decisions, therefore, lowering the cost exposure. We 19 could -- one of the issues that we've got -- come before 20 us, I think that will be in your report next month, and 21 that is what -- what -- what makes up the -- the 22 half-a-million-dollar threshold? Is that the tax 23 itself? Is it the tax plus penalties? Is it the tax 24 plus penalties and interest? 25 So there are some issues that we do have the 26 ability to control, right, in regards to potential 27 exposures and costs in this process. 28 MR. FERRIS: That's correct. 20 1 MR. RUNNER: Okay. 2 MS. HOUSER: Chairman Horton, uh, to put this 3 BCP back on track as we have the rest of the BCPs, may I 4 ask for a Board motion to approve the BCP for 2.5 5 positions and $455,000, and then, uh, proceed with our 6 normal appeal process as we do with all Board-approved 7 BCPs. 8 MS. YEE: Yeah. So move. 9 MR. HORTON: So moved by Member Yee. Second by 10 Member Runner. 11 MS. STEEL: Objection. 12 MR. HORTON: Uh, objection by Member Steel. 13 And -- and the motion, um, just for 14 clarification, Member Yee, is to -- 15 MS. YEE: Uh, is to approve this Budget Change 16 Proposal. It's the first time before us. And then, uh, 17 proceed and direct staff to, um, pursue the appeals 18 process. 19 MR. HORTON: Okay. And -- and your thoughts 20 on -- 21 Member Mandel. 22 MS. MANDEL: No, I -- I, um -- because this is 23 what staff had put forward to the Legislature, because I 24 don't want to assume, uh, an interpretation in the 25 rejection by Finance, and because I kind of have a -- 26 you know, feeling that -- that the, uh, normal process 27 in listening to Mr. Ferris about maybe, you know, they 28 don't quite know what we were really talking about, um, 21 1 I have a feeling that but for this new process of 2 bringing this BCP forward, I have a feeling that they 3 would have at least, um -- that staff would have likely 4 have, um, made an approach to make that explanation. 5 Because those discussions with Finance, I take it, have 6 not occurred. It's send the paper over, send the paper 7 back. 8 Um, so, you know, since we have this new 9 process, it seems like that's the way to go, is they 10 should have those discussions. And it may be that 11 ultimately it's not, you know, fruitful on this point. 12 But I don't want to stop them from doing what I have a 13 feeling would have occurred in the normal course but 14 for -- 15 MS. YEE: Yeah. 16 MS. MANDEL: -- the new process of bringing 17 these forward. 18 MR. HORTON: Okay. 19 MS. MANDEL: You know I'm always late with 20 those comments. 21 MR. HORTON: There's a -- uh, there's been a 22 motion and a second. Objection noted. 23 Ms. Richmond, please call the roll. 24 MS. RICHMOND: Mr. Horton. 25 MR. HORTON: Aye. 26 MS. RICHMOND: Ms. Steel. 27 MS. STEEL: No. 28 MS. RICHMOND: Mr. Runner. 22 1 MR. RUNNER: Aye. 2 MS. RICHMOND: Ms. Yee. 3 MS. YEE: Aye. 4 MS. RICHMOND: Ms. Mandel. 5 MS. MANDEL: Aye. 6 MS. RICHMOND: Motion carries. 7 MS. HOUSER: Thank you. This concludes my 8 presentation. 9 MR. HORTON: Thank you very much. 10 ---oOo--- 11 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 October 23, 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 23 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: November 6, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 24