1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 DECEMBER 19, 2012 9 P 10 OTHER ADMINISTRATIVE MATTERS 11 P4 12 PROPERTY AND SPECIAL TAXES 13 DEPUTY DIRECTOR'S REPORT 14 FIRE PREVENTION FEE PROGRAM UPDATE 15 16 17 18 19 20 21 22 23 24 Reported by: Juli Price Jackson 25 No. CSR 5214 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: David Gau Deputy Director 19 Property and Special Taxes 20 21 ---oOo--- 22 23 For CalFire: Dean Cromwell Chief 24 Planning and Risk Analysis Unit 25 26 ---o0o--- 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 DECEMBER 19, 2012 4 ---oOo--- 5 MS. RICHMOND: Our next item is item P4, 6 Property and Special Taxes Deputy Director's report, 7 P4.1, fire prevention fee program update. 8 MR. HORTON: I believe the Board has reviewed 9 the report and presentation. 10 Discussion, Members? 11 MS. YEE: Yeah. 12 MR. HORTON: Member Yee. 13 MS. YEE: Thank you, Mr. Chairman. 14 I -- I guess in recognition of the fact that 15 there is going to continue to be a lot of noise around 16 this issue, I wanted to just kind of get a sense where 17 we are and what potentially we may want to transmit to 18 the administration and the legislature about the -- 19 about what's happening with this program from an 20 implementation perspective. 21 As we get close to kind of finishing up this 22 first cycle, I guess I'm not feeling confident about 23 really having a grasp or a handle around some of the 24 implementation challenges that we faced. And I want to 25 just get a sense of how we're going to be at the ready 26 for the next round. 27 And -- and if it means additional resources -- 28 and I'm not sure that's really the case -- then we 3 1 should be upfront about that. If it means that we need 2 to do some different kind of programming, I want to be 3 upfront about that. There's a lot of exposure here, I 4 think, not only to our agency, but to the State on 5 this -- on this particular program. 6 And I -- I have to preface my remarks first by 7 commending the staff and Mr. Gau's department for really 8 taking on a lot of the problems that have been 9 identified by the feepayers. 10 We were saddled with, you know, really a 11 problematic identification of the universe of feepayers 12 to begin with. And, to the extent that it's the 13 feepayers who are themselves identifying the problems 14 for us. We've been -- I think the Board staff, 15 Mr. Gau's staff has been really at the ready to just 16 make corrections on the spot and to try to address the 17 problem. 18 I don't believe that's the same experience 19 they're having when they contact CalFire. And, so, we 20 know of some of the problems, we don't know about all of 21 the problems. And I don't know how we get around this 22 in the second round if we haven't had our hands touch 23 all of the things that have been challenges that need to 24 be corrected and aren't necessarily aware of. 25 So, I appreciate that the memo -- some of these 26 problems we've heard about in prior discussions about 27 the fire fee program. I just wanted to stick -- I want 28 us to be in a position of anticipating a little bit 4 1 about how we can maybe mitigate some of this going 2 forward and not just waiting for the solution, but 3 really to suggest some solutions because I do think 4 there's some exposure. 5 I don't know with respect to the revenue 6 projections for what we may realize at the end of this 7 first cycle. I think it was anticipated that we would 8 generate about $85 million from the fire fee. I'm not 9 sure how far off we are. It just seemed like some of 10 the numbers didn't quite make sense to me in the memo, 11 but we can talk about that separately. 12 But the main point I want to make is we've got 13 exposure. We've heard from feepayers. We're doing our 14 best to correct the issues that are identified by 15 feepayers, but we don't know all of the issues. 16 And, so, how do we proactively try to get a 17 handle on this? I don't mean to put you on the spot, 18 but it's just really -- this is the biggest constituent 19 issue of the year. 20 MR. GAU: It has been and we understand. 21 MR. RUNNER: Discussion's been pretty good. 22 MR. GAU: David Gau, Deputy Director of 23 Property and Special Taxes Department. 24 With me at the table today, just by way of 25 introduction, is Dean Cromwell, he's the Chief of the 26 Planning and Risk Analysis Unit of the CalFire. 27 MS. YEE: Uh-huh. 28 MR. GAU: And Liz Houser, Deputy Director of 5 1 Administration. 2 Obviously, we've been in constant and regular 3 contact with CalFire in trying to work out many of the 4 issues that have been identified. We have chronic -- 5 chronicled those. We have our identifying lessons 6 learned in our processing area, as well as the program 7 area, to better work together. 8 We anticipate -- we are already scheduled to 9 convene after the first of the year to go over all of 10 those issues that we have cataloged and have that frank 11 discussion on how to betters ourselves and position 12 ourselves before the next cycle of billings that will 13 start probably in April of next year. 14 MS. YEE: Uh-huh. 15 MR. GAU: Things such as just the data 16 information between the manufactured home issue, the 17 cleansing of the data, which, hopefully, this cycle -- 18 first cycle has done some improvement upon, we are -- 19 again -- and I don't know if Mr. Cromwell -- if you 20 would want him to address things that the CalFire is 21 doing. 22 We did end up -- we are finished with our 23 billings. We finished last week on December 11th. We 24 came in at about $88 million billed, okay, 88.2 -- 25 230,000. 26 MS. YEE: Uh-huh. 27 MR. GAU: We sent bills to 752,000, which is 28 less than anticipated, but a lot of that had to do with 6 1 some of the correction files we received from CalFire 2 and some of the less than $10 billings. 3 So, where we follow up with many of these 4 feepayers or through return mail that has been an issue 5 as well, that's still an ongoing program issue that 6 we're trying to reconcile. 7 MS. YEE: Yeah. 8 MR. GAU: We have ceased sending any demand 9 notices until further notice -- until we know that we 10 have caught up and processed all of our checks on it and 11 we're timely. 12 So, right now there are no further demand 13 notices that -- we've stopped that back on November 14 28th. 15 So, those are a few things that we've 16 identified. But, certainly, we are going to have to sit 17 down internally, as well as externally, and look at the 18 resources. As you mentioned, this has taken on 19 additional resources that weren't anticipated. 20 MS. YEE: Yeah. And that's one of the things I 21 want to really just -- I want to look to Miss Houser to 22 this because you are really good at anticipating, you 23 know, kind of additional resources. 24 But this -- this just really taxed -- no pun 25 intended -- our staff to a degree that I think we could 26 have anticipated in part, probably not entirely. 27 But one thing that I find really unacceptable 28 is for some of the feepayer identified challenges to be 7 1 addressed at the petition level and that just is 2 unacceptable. I mean, it's bad enough that the feepayer 3 has to identify the problem, but they have to wait 'til 4 the petition -- uhmm, you know, are able to get it 5 addressed. And, I mean, that already kind of takes us 6 down the road to the second cycle not being -- being 7 somewhat improved, but not fully improved. 8 But -- but this is -- you know, just kind of 9 time lag and we're -- and I mean we're just busy trying 10 to catch our tail right now is what it feels like. 11 MR. GAU: That has been a lot of it. 12 MS. YEE: And with respect to the types of 13 positions we may have needed to just get up and 14 running -- I know we're doing a lot of this work 15 manually, and, so, we've had to utilize key data 16 operators -- thank you Franchise Tax Board for 17 contracting with us to give us those. 18 But had we known that, we should have put out 19 an alert back up to the Governor's office and the 20 legislature to say, "All decks on hand for all KDOs all 21 over the state to give us a hand." 22 But this is the kind of stuff that I think we 23 have to anticipate. We can't wait for the solution. 24 We've been part of the solution. There needs to be more 25 coordinated efforts, but I just really find it really 26 tough to tell the feepayer, "We can't deal with your 27 issue until, you know, the petition stage." 28 So, it's -- there's a lot of improvement that I 8 1 hope that we can anticipate some of these things. And 2 as you discuss this in January that there be more of a 3 proactive approach. 4 And I don't know what the status of Check 21 5 is, but I'm not holding my breath. 6 MS. HOUSER: I can -- Liz Houser. 7 Yes, on Check 21 we are working with TSD. We 8 are not anticipating it to be ready for the second round 9 of billings in this fiscal year. We're hopeful that 10 it'll be able to do what it needs to do for next fiscal 11 year's billings. 12 So, for this fiscal year's billings we are 13 preparing to go out and hire additional key data 14 operators on a permanent intermittent time base that 15 will allow us to work them through the cycle for the 16 next -- the next round of billing. 17 But then if Check 21 does what it's supposed to 18 do, which is all that upfront processing and uploading 19 to IRIS -- 20 MS. YEE: Right. 21 MS. HOUSER: -- then we would not need those 22 KDOs, the additional permanent intermittent KDOs, for 23 the '13-'14. 24 MS. YEE: And I'm not -- and I'm not suggesting 25 that we expedite anything relative to Check 21 to 26 accommodate this. 27 But if it's not ready, it's not ready. Then we 28 need to deal with the workload that is here before us 9 1 for the remainder of this fiscal year. 2 MS. HOUSER: Yeah. And we'll need to look to 3 see what the total cost was. 4 We do have some overtime numbers for this first 5 round, but we will need to look. Because without -- the 6 original BCP, when we costed it, we costed it planning 7 for Check 21 to be up and operational. And since it was 8 not, then we had to put in a whole -- an entirely 9 different approach with a lot more manual work to 10 actually process both the check and the invoice to 11 upload the data. 12 MS. YEE: Uh-huh. 13 MS. HOUSER: To date we are caught up on all 14 incoming mail. And again thank you to Franchise Tax 15 Board. The 24 people they sent over to us were very, 16 very helpful in moving that forward. 17 So, we're -- we have about 3700 pieces of mail 18 as of 12-17, that's just incoming; 750 in process, in 19 the pipeline; 1500 to be keyed. And then we have about 20 1500 single checks -- that's when someone just puts a 21 check in an envelope and -- and you have to go through 22 and -- 23 MS. YEE: No information, right. 24 MS. HOUSER: -- manually identify it. 25 And those, of course, get mixed in with our 26 single checks for other tax programs. So, we're 27 estimating about 1500 of those are a fire fee. 28 So, we are able to keep up right now as far as 10 1 with the current workload. We've caught all the backlog 2 up and this is just the current that's incoming. But 3 when the next round comes, we will have to augment our 4 processing staff. 5 MS. YEE: Uh-huh. What's your best sense of 6 how close we're going to get to the 85 million? 7 MS. HOUSER: I -- I would have to defer to 8 Mr. Gau on that. 9 I know we've billed it. So, we're just waiting 10 to see if it's going to get paid. 11 MR. GAU: That's a very good question. It will 12 take some time to really realize that. I was doing some 13 quick numbers this morning, based on the fact that we 14 have completed billings. A lot of those toward the end 15 here, obviously, have not gone final, so, they're still 16 within that period of time -- 17 MS. YEE: Right. 18 MR. GAU: -- the 30-day window. 19 So, between what we've already received from 20 feepayers, those that have paid, non final -- that 21 weren't final that did make no payment, we're having 22 about 715,000 so far, maybe another 25,000 are partial 23 payments. 24 So, I hate to -- I don't want to try to cite a 25 number today, but certainly as we -- 26 MS. YEE: That's okay. I guess what I want to 27 know is in the memo -- 28 MR. GAU: Yes. 11 1 MS. YEE: -- part of why I'm not putting a lot 2 of credence on the numbers in the memo is because of all 3 of the issues we just talked about that -- that much of 4 the revenue is probably not fully reconciled yet -- 5 MR. GAU: Yes. 6 MS. YEE: -- with respect to how much is 7 attributable to the fire fee, right? 8 MR. GAU: And that is correct what I do know is 9 that so far what we've received as far as revenue 10 through Friday last week was about 55 million 800 -- 11 MS. YEE: Okay. 12 MR. GAU: -- thousand. 13 MS. YEE: Okay. 14 MS. HOUSER: But the 49 million in the memo -- 15 MS. YEE: Uh-huh. 16 MS. HOUSER: -- that has been reconciled by our 17 accounting staff and that is fire fee money that is in 18 the door. That is fire fee money, it has been 19 reconciled. 20 MS. YEE: So, that -- that 49 million that was 21 from 423 some odd thousand payments, is that the one? 22 MS. HOUSER: Yeah, that's as of 12 -- as of 23 December 14th, 2012. We had reconciled that money. 24 And, so, 49 million had been received and it was for 25 fire fee payments. 26 MS. YEE: Oh, okay. So, that -- so, it's like 27 55 percent of the feepayers are paying 65 percent of the 28 revenue anticipated? Does that make sense? 12 1 I mean, that's part of why I was -- 2 MR. GAU: Yeah. 3 MS. YEE: -- kind of just deciding whether -- 4 that was why I was questioning whether the numbers had 5 actually been reconciled. 6 MS. MANDEL: Percentage? 7 MR. GAU: Yeah, they're hard to -- because of 8 the different final, non final, it's hard to -- 9 MS. YEE: Anyway, I'm just -- I'm raising it. 10 I'm not asking you to respond on the spot. 11 MR. GAU: Okay. 12 MS. YEE: It just suggests that there's more 13 work to do to kind of work the numbers through. 14 MR. GAU: To that I can say yes. 15 MS. YEE: Okay. And then -- and then the 16 gentleman from CalFire, welcome. 17 MR. CROMWELL: Thank you. 18 MS. YEE: Do you have anything to offer? 19 MR. CROMWELL: Well, we're in an adventure 20 together -- 21 MS. YEE: Okay. 22 MR. CROMWELL: -- to say the least. 23 When we started we had a new fee that was 24 enacted in budget language -- 25 MS. YEE: Uh-huh. 26 MR. CROMWELL: -- that covered State 27 responsibility area, which is where CalFire has the 28 financial responsibility for fire protection that covers 13 1 31 million acres or so, about 800 and some odd thousand 2 structures. We have 56 of 58 counties involved and 3 about 680 local agencies that provide fire protection 4 services, which was a function of the Board of Forestry. 5 When we started there were data sets that fit 6 very few of the specific things we needed, either by the 7 law or by the Board regulation. 8 It's not an excuse, it's just a description of 9 what happened. 10 MS. YEE: No, I understand. 11 MR. CROMWELL: Among these were there's not a a 12 single statewide parcel level set of information that we 13 could apply to the State responsibility arena. We had 14 limits to the spatial information on the number and 15 location of habitable structures. We didn't have a 16 single list of mobile homes. 17 And another one was we had some difficulty 18 identifying the boundaries and the financial 19 arrangements that some of the local districts had. 20 So, we're almost set up for the kinds of -- 21 kinds of things that we've encountered. 22 MS. YEE: Uh-huh. Can I ask you a question? 23 MR. CROMWELL: Sure. 24 MS. YEE: And most of what you've identified 25 what we already are knowledgeable about. 26 Is there any contemplation on the part of the 27 administration to revise the fee in any manner? 28 MR. CROMWELL: I don't know. 14 1 MS. YEE: 'Cause I think some of the feedback 2 we've gotten -- and I don't know how often you are in 3 contact with feepayers -- but some of the feedback we've 4 gotten from those who are subject to the fee raise some 5 interesting policy issues and -- 6 MR. CROMWELL: There are. 7 MS. YEE: -- okay. And I don't know if you're 8 forwarding those or considering those or -- I mean, 9 we're not the policymaking body in this whole effort, 10 but I don't know where to quite deposit those concerns. 11 MR. CROMWELL: We hear from -- at least I hear 12 from -- as do our service centers -- we hear from 13 constituents or our feepayers every day. 14 MS. YEE: Uh-huh. 15 MR. CROMWELL: Because we're getting calls and 16 callbacks from CalFire. We record what is told to us 17 and we make changes where we can in our base information 18 and data and we pass up -- the rest of the material up 19 to our management. 20 We have had a -- maybe not the same experience 21 you've had with calls because we used a service center, 22 given the short time and our ability to hire -- or not 23 hire perms. 24 We have had about 130,000 calls. And from that 25 comes a certain pattern of information and we've been 26 able to pretty well identify it. 27 MS. YEE: Uh-huh. Are you -- are you aware of 28 what some of those are, what some of the issues are? 15 1 MR. CROMWELL: Some we've identified and 2 they're seen in Board of Forestry change -- proposed 3 changes in Board of Forestry regulations. 4 They weren't able to able to adopt them at 5 their last meeting, but will consider them in the first 6 part of next year. 7 One of them was the discussion over the 30 8 days. 9 MS. YEE: Uh-huh. 10 MR. CROMWELL: And that's been a real forum for 11 us because the 30 days in the petition, it's in the law 12 and it's in the regulation. And that's just not long 13 enough. 14 MS. YEE: Uh-huh. 15 MR. CROMWELL: And that's -- that's being 16 passed on. 17 And we're -- at this point we're just trying -- 18 when the petition comes in, before or after 30 days as 19 best we can, to see if it's raising an issue that we 20 need to address. We've kind of gotten to that point. 21 The secondary is in the appeal process that 22 Board regulations set up, the law is pretty specific 23 about information coming in and the use of a petition. 24 But the process that our Board of Forestry and Fire 25 Protection set up didn't have a way to go beyond the 26 decision made on the appeal that CalFire made. And we 27 requested -- and it's in the proposed regulations -- 28 that they have the Executive Officer review -- or be 16 1 available to review on request what those decisions are. 2 So, it gives a second level of review. 3 Unlike your Board, the Board of Forestry and 4 Fire Protection is a part-time Board. And fees and 5 taxes or any kind of fees and appeals is a different 6 realm for them. 7 The other things that we have notified -- have 8 noticed have been some -- clarification of the meaning 9 of local agencies. And we've managed to find most of 10 the districts and local agencies that we missed. We'll 11 be able to improve that. And there's some supposed 12 changes in the regulation. 13 There are some other things in the law, but I'm 14 not sure at this point whether they'll be considered or 15 not. Those are the kinds of things that we've 16 identified, although we also had a provision in there 17 that allows CalFire to adjust the basis of information 18 for the bill any time we find it and from whatever 19 source. We didn't have that in the initial emergency 20 regulations. These are things that we found out. 21 MS. YEE: Okay. I'm -- I'm still trying to 22 figure out where to transmit some of these concerns 23 we've heard. 24 I mean, some of the policy concerns, I think -- 25 I know I've heard and many of us have probably heard -- 26 really relates to how the fee was structured, that it 27 was a single amount that applied statewide. And there 28 were concerns about it not being a tiered fee that -- 17 1 based on ability -- and also some provisions based on 2 ability to pay. 3 And why land that is served by an SRA, where 4 there are no structures that exist that may be more 5 prone to fire hazard is not treated, you know, the same 6 or greater than those where structures are inhabited. 7 So -- 8 MR. CROMWELL: The policy levels that you've 9 raised have been transmitted to the Board of Forestry by 10 a fair amount of correspondents. 11 MS. YEE: Uh-huh. 12 MR. CROMWELL: It's covered all of the issues. 13 And the Board has -- the Forestry and Fire Protection -- 14 has the ability to address the level of the fee and 15 structure the fee to reflect these kinds of 16 considerations. 17 To date they have not gone in that direction, 18 but if -- in a communication between your Board and the 19 Board of Forestry and Fire Protection on your findings 20 and what you've encountered in your constituents would 21 be appropriate, I'm sure, as one -- as one avenue. 22 MS. YEE: Okay. Thank you. 23 Thank you, Mr. Chairman. 24 MR. HORTON: Thank you. 25 Further discussion? Member Runner. 26 MR. RUNNER: Yeah, just a follow-up, maybe 27 right on to one of the -- one of those items. 28 Again I guess one of the issues you must be 18 1 trying to distinguish is the issue that you can try to 2 deal with -- through regulation versus what's in the 3 statute. 4 MR. CROMWELL: Yes. 5 MR. RUNNER: 'Cause one of the issues, 6 obviously, brought up was that -- just brought up -- was 7 this idea that if I have a structure and I live there 8 and I do all my maintenance around my structure, I pay a 9 fee. The guy next door who has an empty lot doesn't. 10 Now, that's in statute, I believe? 11 MR. CROMWELL: The definition -- the fee is 12 applied to habitable structures within -- 13 MR. RUNNER: Right. 14 MR. CROMWELL: -- SRA. 15 MR. RUNNER: Right. 16 MR. CROMWELL: So, if there's a vacant lot next 17 to it, the -- by law, the fee doesn't apply. 18 MR. RUNNER: Right. 19 MR. CROMWELL: That's correct. 20 MR. RUNNER: So, my question is, are you -- in 21 the midst of that, are you -- when will you be 22 prepared -- when do you think the Board will be prepared 23 with what you believe you can address through your 24 regulatory process versus what it is that you will have 25 to adjust through statute? 26 MR. CROMWELL: Are you referencing the 27 difference between vacant land and structures or just 28 any -- 19 1 MR. RUNNER: Anything that you may feel like 2 you have to -- for instance, the 30-day issue, I believe 3 is an issue that you've got to address through 4 statute? 5 MR. CROMWELL: It's some statute, although the 6 Board has proposed a regulation that -- we stole one of 7 your processes -- so, when something comes in after 30 8 days it's treated as an item of protest and moves into 9 the appeal process. 10 We've tried that as an option. We're not sure 11 we have the authority. But we're trying that as a 12 regulation and studying it now. 13 Other than that, I'm not sure what the Board 14 will suggest. They have an annual report to go to the 15 legislature. I don't know what's in it that at this 16 point. 17 MR. RUNNER: Let me ask you something. When 18 you say you received it, the problem is we receive them, 19 right? 20 So, you said when you receive them after 30 21 days, you are -- you are making -- you're making a 22 regulatory decision as to whether it was a protest, 23 therefore, the 30 days doesn't apply? 24 MR. CROMWELL: That -- that's in the proposed 25 regulation. 26 MR. RUNNER: Okay. 27 MR. CROMWELL: We don't -- we don't have any 28 ability right now to really -- 20 1 MR. RUNNER: Well, my question is -- 2 MR. CROMWELL: -- handle it. 3 MR. RUNNER: -- right now, you're not the 4 receiver of these? 5 MR. CROMWELL: No. 6 MR. RUNNER: We are. 7 MR. CROMWELL: Well, we -- we -- in form of a 8 petition. 9 MR. RUNNER: Oh, the petition -- you're talking 10 about the petition itself -- 11 MR. CROMWELL: Yes, I'm sorry -- 12 MR. RUNNER: -- not the fee? 13 MR. CROMWELL: -- the petition. 14 MR. RUNNER: Okay, I'm sorry. 15 MR. CROMWELL: Because the -- 16 MR. RUNNER: The petition. 17 Okay, let me ask you just on a couple of 18 issues. One of the issues that again I'm -- it's 19 interesting because, you know, I was dealing with lots 20 of people telling them, "Hey, yeah, you should go ahead 21 and follow your appeal." 22 The problem is embedded in the law is this 23 punishment for appeal. Let me just give an example. If 24 you just don't file and you don't pay, after a year 25 you're going owe $133, if your base was 115. 26 If you file an appeal and were denied, after a 27 year you're going to owe $340. So, there's almost a -- 28 a disadvantage for appealing. 21 1 And, so, it puts -- now it's put me in a 2 strange position -- do I tell to people to appeal or do 3 I tell them just not to pay? Because if I tell them to 4 appeal and they're denied, they've got what is -- what, 5 a 20 percent per month interest. 6 MR. CROMWELL: The Board of Forestry is well 7 aware of that issue and probably shares your concerns. 8 MR. RUNNER: Okay. So -- and, again that -- I 9 think by statute? 10 MR. CROMWELL: Yes, that's the -- 11 MR. RUNNER: Okay. 12 MR. CROMWELL: -- statute. 13 MR. RUNNER: So, again, when do you think 14 you -- your -- the Board will be prepared with what -- I 15 mean, we're coming -- it's December. Bills are being 16 introduced, you know, already. There will be some more 17 bills introduced here, you know, in two or three weeks. 18 When -- when do you believe that the Board will 19 be prepared so that we can kind of get an idea? 'Cause, 20 quite frankly, there might be things that we may want to 21 introduce -- 22 MR. CROMWELL: Agreed. 23 MR. RUNNER: -- on this issue. 24 MR. CROMWELL: Agreed. I think it's probably 25 healthy. 26 The Board probably in early January -- they 27 have a report due around the 1st. So, I would guess 28 that sometime in January those kinds of legislative 22 1 recommendations would emerge. 2 MR. RUNNER: Okay. 3 And let me just -- I mean, I'll -- I mean, I 4 think -- I think -- I think very much the Board -- both 5 Boards -- have been -- are victims in this process of 6 a -- of a thought that the legislature came out with, 7 you know, put it in statute and then creates all kinds 8 of issues in regards to how it actually gets 9 implemented. 10 And, so, I -- I really do believe that -- that 11 we're both very much, you know, stuck in that process. 12 Let me just ask you about how your appeal 13 process is going. 14 MR. CROMWELL: Sure, okay. 15 MR. RUNNER: And -- and 'cause what I sense is 16 there's been a little bit of a pivot in regards the 17 beginning versus where you are now. And I guess we just 18 learned that, I mean, because -- 19 MR. CROMWELL: Yes, I'd say we've learned 20 that. 21 MR. RUNNER: -- yeah. So, tell me how -- 22 MR. CROMWELL: Well, basically the appeal 23 process is laid out in the law itself. And then it's 24 made -- delineated some by the Board of Forestry. 25 In the -- the way it works is the petitions 26 come in to the call center or to the service center and 27 they're entered and processed. We also are the 28 recipients of those that the Board of Equalization gets 23 1 and the State Board of Forestry. So, we're doing 2 certain numbers of them in triplicates. That's also in 3 the law. 4 The petitions are sorted by the reasons that 5 people raise -- such things as legal reasons, in and out 6 of SRA, were they in the fire district, was there an 7 ownership issue, things of that sort. 8 If there's not enough information in reviewing 9 them to make a decision, then a more information letter 10 is sent, hopefully in -- with enough time for folks to 11 respond. Sometimes phone calls are made if it's 12 important to clarify what's it the petition and times 13 are coming. 14 If the information is clear based on what we 15 have in front of us and it says "Approved," then CalFire 16 approves. If the information provided in the petition 17 is not -- not clear and is -- or is clear about denial, 18 then we'll deny. If it's not clear, then it moves up 19 to another part of CalFire for an extra review and then 20 we make a decision. So, it has the double -- kind of 21 that double review. 22 The -- after the decision is made, it moves out 23 to the public in the form of a decision letter and 24 adjustments are made to the file at the Board of 25 Equalization. 26 We're -- as much as we can, there's not an 27 appeal -- there's not an appeal of the decision once 28 made. I talked to that a little bit earlier. 24 1 If we get calls from folks wondering about 2 their denial, we'll go back and look at it to see if we 3 have made mistakes. That's sort of where we're emerging 4 to. 5 And at the 30-day limit -- we have a fair 6 number of petitions that have come in late and they will 7 sometimes get -- will often get a not considered letter. 8 Sometimes now we're going back through and looking to 9 see what are actually raised. 10 We've handled -- most of the petitions, I don't 11 know if this is of interest to you -- of the kinds of 12 petitions that have come in, around 74 percent or so 13 are -- raised questions about the illegal nature of the 14 fee or the proposed illegal nature of the fee or 15 questions about folks who say they shouldn't pay. 16 The next one -- it's under 10 percent of 17 them -- have to do with habitable structures. So far 18 well over 80 percent of those petitions coming in are 19 being approved. 20 Another set of petitions that comes in deals 21 with are they in State responsibility or not? And it's 22 about -- it's a little bit less than half the petitions 23 that have been approved -- and this is largely a 24 function of our SRA tracker or our SRA viewer, which is 25 a geospatial viewer. And at the edge of the boundaries 26 it sometimes shows people as in and they're not or shows 27 people not in and they are. So, we're having to go back 28 and look at that in more detail and we just don't have 25 1 the technology and the time to make it more accurate. 2 The other is fire districts or local agencies 3 that have fire protection. That's a -- fairly few 4 because once we find out people in an agency should have 5 had credit, we take care of it and do an adjustment file 6 for the whole -- the whole thing. 7 Property ownership, it's about 6 percent. 8 So, that's -- that's our appeals petitions so 9 far. 10 MR. RUNNER: I do -- I do -- I do. 11 This -- again, you -- you -- this is especially 12 -- I mean, I have half of these people in my district. 13 And it takes up a lot of my staff time in regards to 14 dealing with this issue. So, it is significant for 15 my -- my -- my citizens. 16 Let me just ask real quick. The last one we've 17 heard from -- that seems to be a double billing issue -- 18 is the issue of property held in trust. 19 MR. CROMWELL: Uh-huh. 20 MR. RUNNER: Where it is that you've got 21 a piece of property, you know, you as a family have put 22 money -- or put the property in trust, but it's also 23 then -- and, so, it gets double billed because the trust 24 gets a bill and the property -- and somewhere along the 25 line some other property tax bills identified or somehow 26 and so now we're getting those -- people are getting 27 double billed. 28 Have you guys seen much of -- we're -- 26 1 MR. CROMWELL: No. 2 MR. RUNNER: -- that's what we're hearing from 3 somebody. 4 MR. CROMWELL: No. We actually -- we were -- 5 your staff, whom we have worked with some, has gave us 6 an alert to that being a -- 7 MR. RUNNER: Okay. 8 MR. CROMWELL: -- possible issue of concern. 9 And we took a look at it and couldn't find -- 10 MR. RUNNER: Okay. 11 MR. CROMWELL: -- any examples of it. 12 Normally if a -- something like that came in, 13 it -- a parcel would typically only have one bill unless 14 it's a mobile home. 15 And if it came in and we were aware of it, we 16 would treat it as a double bill, get it on one bill and 17 correct it for next year and hope it not be a problem. 18 MR. RUNNER: Okay. Okay, thank you. 19 MR. HORTON: Further discussion, Members? 20 Thank you very much for your presentation 21 before this Board. 22 Ms. Richmond, what's our next item? 23 MS. YEE: Well -- 24 MR. HORTON: Strike. 25 MS. YEE: -- I'm sorry. 26 May I -- I noticed something and while 27 Mr. Gau's up here, I just wanted to see if we could -- 28 if I could just notice something to come back in 27 1 January? 2 The -- I wanted to just continue the 3 discussion, I think it's in Senator Runner's purview, 4 but the issue of the embedded software and how we're 5 coming along with developing work group for that? 6 MR. RUNNER: Well, yeah, I can -- we can give 7 you a quick -- you want a quick update now, in other 8 words? 9 MS. YEE: Yeah. 10 MR. RUNNER: Yeah, we are -- I'll let David get 11 the details to it, but I'll give you a quick summary. 12 MR. GAU: Sure. 13 MR. RUNNER: We have -- beginning to -- in 14 fact, I think we're meeting tomorrow -- 15 MR. GAU: I was just going to mention that, 16 yes. 17 MR. RUNNER: -- to -- to begin the process to 18 identify who and who the -- who the leads processes 19 would be in the working groups, how to set out a map for 20 where it is we want to go, trying to meet -- I think in 21 our last meeting we talked about it being as broad as 22 possible. 23 And, so, our anticipation is that we will be 24 talking -- finishing up who it is and how it is it's 25 structured tomorrow. 26 Invitations will go out and structured in 27 January with probably meeting by the end and coming 28 together with the first meetings into -- into the end of 28 1 January, first of February. 2 I would certainly invite any of the Board 3 Members who have thoughts as to how it should be 4 populated to -- to -- to let Mr. Gau or I know or my 5 office. 6 But I think our intention is to be fully 7 engaged in this process, you know, by the second month 8 of the year. 9 MS. YEE: Okay. That would be great. 10 Can we just get update in January? 11 MR. RUNNER: Sure. 12 MR. GAU: Certainly. 13 MS. YEE: Okay, thank you. 14 MR. HORTON: Thank you again. 15 ---o0o--- 16 17 18 19 20 21 22 23 24 25 26 27 28 29 1 . 2 REPORTER'S CERTIFICATE 3 4 State of California ) 5 ) ss 6 County of Sacramento ) 7 8 I, JULI PRICE JACKSON, Hearing Reporter for the 9 California State Board of Equalization certify that on 10 DECEMBER 19, 2012 I recorded verbatim, in shorthand, to 11 the best of my ability, the proceedings in the 12 above-entitled hearing; that I transcribed the shorthand 13 writing into typewriting; and that the preceding pages 1 14 through 29 constitute a complete and accurate 15 transcription of the shorthand writing. 16 17 Dated: JANUARY 14, 2013 18 19 20 ____________________________ 21 JULI PRICE JACKSON 22 Hearing Reporter 23 24 25 26 27 28 30