1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 JULY 30, 2019 8 9 10 11 ITEM K3 12 PROPERTY TAX DEPUTY DIRECTOR'S REPORT; 13 ITEM K3(A) 14 FISCAL YEAR 2019-'20 15 PRIVATE RAILROAD CAR TAX RATE 16 17 18 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 David Yeung 13 Equalization Staff: Chief County-Assessed Properties 14 Division Property Tax Department 15 Mark Durham 16 Chief Legislative, Research & 17 Statistics Division 18 Henry Nanjo Chief Counsel 19 Toya Davis 20 Clerk Board Proceedings 21 22 ---oOo--- 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JULY 30, 2019 4 ---oOo--- 5 MS. COHEN: Good afternoon, ladies and 6 gentlemen. I'd like to bring us back into session. 7 Please note it's 12:58 p.m. on Tuesday, July 30th. 8 Madam Clerk, what I'd like to do next is to 9 move our agenda around a little bit. I'd like to 10 move our constitutional functions next on the agenda, 11 so we can take that. 12 If you could call the item. I think it's 13 Property Tax Director's Report. 14 MS. DAVIS: Okay. 15 Our next item is K3 -- 16 MS. COHEN: Thank you. 17 MS. DAVIS: -- the Property Tax Deputy 18 Director's Report. 19 The Property Tax Director, Mr. David Yeung, 20 will accompany the speakers for each of the K3 items. 21 The first is K3(a), Fiscal Year 2019/'20, 22 Private Railroad Car Tax. 23 Mr. Durham is also coming forward, and they 24 will both be presenting. 25 This item does not require a vote. 26 MS. COHEN: Thank you. 27 Hi, Mr. Durham. 28 MR. DURHAM: Good afternoon. 3 1 MS. COHEN: Good afternoon, Mr. Yeung. 2 MR. YEUNG: Good afternoon. 3 MS. COHEN: All right. The floor is yours. 4 MR. DURHAM: Chair Cohen and Honorable 5 Members, I'm Mark Durham with the Legislative, 6 Research and Statistics Division. 7 And, again, I'll be giving just a brief 8 overview of the Private Railroad Car tax rate, or 9 what we call the PRCT rate. 10 The first slide shows what, who and how. 11 What is the PRCT? Who pays the tax, and how is it 12 used? 13 The PRCT is a tax on railcars owned by 14 non-railroad companies, such as Chevron U.S.A., Tyson 15 Foods, etc. And those are operated on the California 16 rails. 17 The amount of tax is based on the number of 18 days the cars are physically in the state. And the 19 owners of those cars pay the tax, which is a state 20 tax, and that goes to the general fund. 21 So there are four steps that are needed to 22 be followed to get to the tax amount. 23 The first step is the State-Assessed 24 Property Tax Division calculates the total value 25 using the cars that were in the state of California. 26 Next, the Legislative, Research and 27 Statistics Division calculates the 4R Act ratio, 28 which was approved in May of this past year. 4 1 And 4R stands for the Railroad 2 Revitalization and Regulatory Reform Act that was 3 enacted by Congress in 1976. 4 The third step is SAPD calculates the total 5 assessed value by multiplying the value by the 4R Act 6 ratio. 7 Then LSRD calculates the PRCT rate, which is 8 what we're here to discuss today, which is presented 9 to the Board as informational only in July. 10 And then final step is SAPD calculates the 11 amount of tax for the Board approval in July by 12 multiplying the total assessed value by the PRCT 13 rate. And Mr. McCool will be presenting that a 14 little later. 15 So the last slide is kind of showing you a 16 table over the previous years and what the rates have 17 been. 18 And if we look at 2018 for last year, it 19 shows that the equivalent cars were 32,363. SAPD 20 calculated a value of 1.425. The rate -- the 4R Act 21 rate was 60.73. 22 So if we just simply take the 23 1.25 -- .425, multiply it by the 60.73, we get a 24 total-assessed value of 865 million. 25 In 2018 the PRCT rate was 1.149 percent, 26 multiplying the 865 by that rate gives us a 9.9 27 million that went to the general fund. 28 So for this year staff recommends a rate -- 5 1 recommended a rate of 1.151 percent for the 2019/'20 2 Private Railroad Car tax rate, which was approved by 3 the Executive Director earlier this month. 4 And that concludes my presentation. 5 MS. COHEN: Thank you. 6 Colleagues, any questions for Mr. Durham? 7 Okay. Thank you. 8 Keep moving. 9 MR. DURHAM: Great. Thank you. 10 MS. COHEN: Thank you, Mr. Durham. 11 MR. DURHAM: Sure. 12 ---o0o--- 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 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 July 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 6 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: August 9, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 7