1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 APRIL 30, 2019 8 9 10 ITEM G 11 RULEMAKING SECTION 100 CHANGES; 12 ITEM G1 13 PROPERTY TAX RULE 140, 14 WELFARE EXEMPTION REQUIREMENTS 15 FOR LOW-INCOME HOUSING PROPERTIES; 16 ITEM G2 17 PROPERTY TAX RULE 464, 18 VETERANS' EXEMPTION 19 20 21 22 23 24 25 26 27 REPORTED BY: Jillian M. Sumner 28 CSR NO. 13619 1 1 P R E S E N T 2 3 For the Board of Honorable Malia S. Cohen Equalization: Chair 4 Honorable Antonio Vazquez 5 Vice Chair 6 Honorable Ted Gaines First District 7 Honorable Mike Schaefer 8 Fourth District 9 Yvette Stowers Appearing for Betty T. 10 Yee, State Controller (per Government Code 11 Section 7.9) 12 For the Board of Henry Nanjo 13 Equalization Staff: Chief Counsel Board Proceedings 14 Richard Moon 15 Legal Department 16 Toya Davis Clerk 17 Board Proceedings 18 ---oOo--- 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 APRIL 30, 2019 4 ---oOo--- 5 MS. DAVIS: Our next item is Item G1 and G2, 6 Rulemaking Section 100 Changes. 7 Item One is Property Tax Rule 140, Welfare 8 Exemption Requirements for Low-Income Housing 9 Properties. 10 Mr. Moon. 11 MS. COHEN: Welcome back, Mr. Moon. 12 MR. MOON: Thank you. 13 MS. COHEN: Thank you. 14 MR. MOON: Good morning, Madam Chair and 15 Members of the Board. I'm Richard Moon with the 16 Legal Department, with Henry Nanjo our Chief Counsel. 17 I'm here to request your approval to 18 complete the Section 100 changes for Property Tax 19 Rule 140. 20 This change would make the rule consistent 21 with recent legislation that increased an exemption 22 cap for certain types of low-income housing from 23 10 million of assessed value to $20 million in 24 assessed value. 25 Thank you. 26 MS. COHEN: Thank you, Mr. Moon. 27 Actually, I just want to take a moment just 28 to let you know how much we appreciate your work that 3 1 you -- 2 MR. MOON: Thank you. 3 MS. COHEN: -- and your team -- detailed 4 examinations are absolutely critical to our core 5 function. And it's a necessary and essential part of 6 our rulemaking. 7 Needless to say, you know, our colleagues, 8 our property tax system is well served by the careful 9 examinations conducted by the State Board of 10 Equalization's Property Tax Administration Team. 11 So, Mr. Moon, I just wanted to take a moment 12 and just publicly acknowledge your work. 13 MR. MOON: Thank you. 14 MS. COHEN: Thank you. 15 MR. MOON: Thank you very much. 16 MR. NANJO: Thank you. 17 MS. COHEN: Okay. 18 If there are no other questions. 19 Yes, sir. 20 MR. VAZQUEZ: Just one quick one. 21 What is the physical impact of this stuff? 22 You know, as I was looking at it, I guess it 23 shows -- well, the results. I guess there's an 24 increase on the exemption of the -- of the 25 threshold. 26 MR. MOON: That's correct. 27 MR. VAZQUEZ: So what would be the physical 28 impact of that? 4 1 MR. MOON: You mean in terms of how much 2 more properties might be eligible for -- 3 MR. VAZQUEZ: Yes. 4 MR. MOON: -- exemption? 5 Well, we're not exactly sure how it will 6 impact the future. There was some discussion in the 7 analysis in the Senate and Assembly reports that 8 there were nonprofits considering acquiring more 9 low-income housing that might qualify for this 10 exemption. 11 In terms of the past, we're only aware of 12 one nonprofit organization that this -- that this 13 SB 115 -- 1115 would affect for years between 14 '17 -- to 2017 and 2019. 15 MR. VAZQUEZ: Okay. Thanks. 16 MS. COHEN: So this is really no real 17 substantive changes, right? 18 MR. MOON: Well, the exemption cap would be 19 a substantive change. Our best information says it 20 would affect one nonprofit for 2017 through '19. And 21 then additional nonprofits past 2019. 22 MS. COHEN: Okay. 23 MS. STOWERS: Madam Chair. 24 MS. COHEN: Yes. Please. 25 MS. STOWERS: I have a couple of questions. 26 I have two questions, actually. 27 Looking at your draft-change language, the 28 first question I have is I see that you've striked 5 1 out "should not exceed 20,000 in tax," and replaced 2 it with "20,000 in assessed value." 3 My question is, when I look at the existing 4 statute, I don't see 20,000 in tax. 5 MR. MOON: Yeah. The 20,000 in tax was 6 leftover from the statute previous to the one in 7 effect before SB 1115. So there was a statutory 8 change that we missed in the rule. 9 So we actually should have changed that 10 20,000 in tax to $10 million in assessed value. And 11 now with this change, we're changing it to be 12 current. 13 MS. STOWERS: Thank you for that. So that's 14 kind of clarification. 15 My next question: what would be the 16 effective date of this rule change, and where would 17 we see this effective date in the regulation? 18 MR. MOON: Yes. So you would see it in the 19 history notes to the regulation, and it would be 20 112019. 21 MS. STOWERS: All right. Thank you. I 22 appreciate that. 23 MS. COHEN: Thank you, Ms. Stowers. I 24 appreciate those clarifying questions. 25 Colleagues, are there any other questions? 26 If not, may I have a motion? 27 MR. VAZQUEZ: So moved. 28 MS. STOWERS: Second. 6 1 MS. COHEN: Motion made by Vazquez; seconded 2 by Stowers. 3 Colleagues, we can take this without 4 objection? 5 Looks like we can. 6 Without objection, motion passes 7 unanimously. 8 Thank you. 9 Next item, please. 10 MS. DAVIS: Item Two is Property Tax Rule 11 464, Veterans' Exemption. 12 Mr. Moon will present this item as well. 13 MR. MOON: Good morning. 14 Richard Moon with the Legal Department, with 15 Henry Nanjo our Chief Counsel. 16 We're here to request the approval to 17 complete the Section Rule 100 changes for Rule 464. 18 And this change would renumber that rule to 19 Rule 149 to place it in a more appropriate place 20 within the rules. 21 So the 140s, or the 100s, deal with rules 22 regarding exemptions. And so we're moving this rule 23 that deals now just with federal exemptions to that 24 portion of the rules. 25 MS. COHEN: All right. So what we're 26 talking about is we're just updating references? 27 MR. MOON: Yes. We're just -- we're just 28 renumbering the rules. 7 1 MS. COHEN: All right. I appreciate that. 2 Again, thank you, Mr. Moon, for bringing 3 this matter before this body. 4 Any questions to my right? 5 Any on my left? 6 All right. Is there a motion I can take on 7 this? 8 MR. VAZQUEZ: So moved. 9 MS. COHEN: All right. Motion made by 10 Vazquez; seconded by -- 11 MS. STOWERS: Second. 12 MS. COHEN: -- by Ms. Stowers. 13 We can take that without objection. 14 Thank you. 15 ---oOo--- 16 17 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, Jillian Sumner, Hearing Reporter for 8 the California State Board of Equalization, certify 9 that on April 30, 2019 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 8 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: May 23, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 9