1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 OCTOBER 22, 2019 8 9 10 11 ITEM K 12 OTHER ADMINISTRATIVE MATTERS; 13 ITEM K2 14 CHIEF COUNSEL REPORT; 15 ITEM K2a 16 LEGAL WORKLOAD QUARTERLY REPORT 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 13 Equalization Staff: Henry Nanjo Chief Counsel 14 Legal Department 15 Brenda Fleming Executive Director 16 Toya Davis 17 Clerk Board Proceedings 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 OCTOBER 22, 2019 4 ---oOo--- 5 MS. DAVIS: Our next item is K2a, Chief 6 Counsel Report; legal workload quarterly report will 7 be presented by Mr. Nanjo. 8 MS. COHEN: Okay. Thank you. 9 Good afternoon. 10 MR. NANJO: Good morning, again, Chair 11 Cohen, Members of the Board. Henry Nanjo, Chief 12 Counsel, Board of Equalization. 13 And as requested, this is a quarterly update 14 of the Legal Department's workload. 15 So the next slide here is slide two. You're 16 probably familiar with my team members now. As I 17 think I reported last month, unfortunately one of my 18 attorneys did retire. So we're a little 19 short-staffed. But the good news is we're currently 20 in recruitment for two Tax Counsel IIIs, and an AGPA, 21 which is going to be -- well, which is in progress as 22 we speak. 23 On the next slide I have repeated from my 24 last presentation the various areas of subject 25 matters that Legal Department works on. Just to kind 26 of keep the public aware of that. 27 We -- I have had an opportunity to review 28 our assignment tracking systems, and we have put some 3 1 more details in to provide further information to the 2 Board and public as to the things that Legal 3 Department works on. 4 The next slide is the quarterly metrics for 5 this period, July through September of this month. 6 And as you can see, the added item is "Public Record 7 Acts request." 8 One thing that wasn't captured in my 9 previous report was a number of Public Record Acts 10 requests that my office has to deal with. And as you 11 can see in the last quarter, that was 186. Quite a 12 bit. So that actually takes up a lion share of one 13 of my attorney's time on this. 14 Let's see -- the next item is the statistics 15 for the first half of the year. This is a repeat 16 from my prior presentation. Just to give you kind of 17 a snapshot of what we've done. Again, part of the 18 problem was Public Record Acts request weren't 19 captured in this. 20 (Whereupon Mr. Gaines was present in the 21 room.) 22 MR. NANJO: So that item is missing. It 23 will be on any future reports. 24 One of the things, as I kind of mentioned to 25 the Board Members, is this time of year is a 26 difficult time for Legal to try to keep up with or 27 catch up with our technical requests for opinions, 28 legal advice, and things of that nature. 4 1 As you know, two of my attorneys are 2 dedicated to the SAPD appeals. And, as such, they 3 are somewhat limited from being able to assist 4 program. 5 And then I have three attorneys who spend 6 the majority of their time working on the SAPD 7 appeals doing the legal work for the program. So 8 during this time of year, from July through December, 9 that's primarily their focus. 10 I do keep the other parts of the operation 11 going, so you don't see a drop in publications, 12 regulations and administrative comments. But you do 13 see kind of a hit on the technical advice. And 14 that's to be expected. 15 The next item is the category descriptions 16 of each of the areas. Basically gives you an idea of 17 what's in each Public Record Acts request. This 18 results from all kinds of work, any kind of requests 19 from the public. Typically, it's for data. 20 Sometimes it's for old records that come in from a 21 variety of sources. 22 Representative tasks, sometimes this is 23 something that comprises five or six pages, sometimes 24 it's literally thousands of pages. 25 The challenge here is with limited systems, 26 we have to try to go back and find some of this data. 27 And some of it is, for lack of a better term, 28 interweaved with CDTFA. And we work hand in hand 5 1 with them many times for that. 2 The next topic area is administration. And 3 these are assignments related to the administration 4 of BOE. Typically, these certain things asked for by 5 either the Executive Office, could be Board Members, 6 it could include advice and training, representative 7 examples include Board Member appeals training, which 8 we've done in conjunction with SAPD, researching 9 various issues relating to Bagley-Keene, 10 confidentiality, any variety of issues that come up. 11 The next slide talks about our publications 12 reviews. And this is having to do with a lot of the 13 assessor handbooks, letters to assessors, annotation. 14 A lot of the materials that go out of program staff, 15 Legal does review for legal consistency, legal 16 appropriateness, any kind of issues. And that takes 17 a number of time. 18 And, again, I'm not going to go into every 19 single bullet. But the bullet gives you a 20 representative example of what's under that. 21 The next item is regulations. As you know, 22 we've been doing emergency regulations for the 23 certificated aircraft. We still try to get other 24 regulations through, a lot of the update regulations 25 that I've already advised you about. 26 A lot of our work is in kind of keeping on 27 Department of Finance for their approvals, as I 28 previously reported on, to try to get things across 6 1 the finish line. So I do have a couple of attorneys 2 who work on regulations as part of their duties. 3 The next slide is on technical advice. And 4 this is provision to property tax staff or assessors, 5 taxpayers, or taxpayer representatives. 6 Of the 42 completed assignments giving 7 technical advice, 18 were to staff and assessors. 8 And, again, as you know from my previous 9 presentations, we give priority to requests from 10 staff or assessors. Or if the member of the public 11 has an issue that is jointly requested by them and 12 the assessor's office, we give those priorities. 13 Those can be anywhere from phone call 14 advice, or could be formal opinions that we write up. 15 The formal opinions, the Board Members get copies of, 16 and get some advance look at. 17 The poplar topics, we do a lot on 18 exemptions, we do a lot on change of ownership, and 19 some on assessment appeals that they have from their 20 Assessment Appeals Board. 21 The next item is to kind of give you a 22 snapshot of our pending items. The workload that we 23 have currently as we speak. 24 We're, again, trying to reduce our response 25 times, but we're handicapped by limited staff. 26 Currently we have 10 PRA requests that we're 27 handling. Those will be done in a statutory period 28 of 10 days for a response. Sometimes getting the 7 1 documents can take longer depending on how plentiful 2 the documents are. 3 In administration, we have eight issues 4 pending; publications review, there are five matters 5 that are in various levels of review with the 6 attorneys. 7 State-assessed appeals, there are 21 8 matters. You don't -- the reason that's above the 15 9 number that -- or 14 number that Member Gaines was 10 asking about is that we do have private railcar tax 11 appeals, and some other issues that may not be 12 immediately part of this December period or December 13 deadline, but will be coming up shortly in the first 14 part of the year. 15 Regulations, there are ten regulations set 16 that we are in the process of reviewing for updating. 17 And then technical advice, these are the 18 opinion requests that are pending. And we still have 19 70 of those pending. 20 So next slide, we'll go to the metrics. 21 This kind of gives you a snapshot of what the Legal 22 office handles in a given year. 23 For 2019, this is what we've handled thus 24 far: 856 total assignments. That looks really big. 25 500 of them are part of our Public Record Acts 26 requests. And that number gives you an indication of 27 how many of these we get. 28 Next slide. 8 1 That is it for the snapshot. I'm here to 2 answer any questions. 3 We're doing what we can with the staff we 4 have. 5 MS. COHEN: Thank you. 6 MR. NANJO: Not a problem. 7 MS. COHEN: Thank you very much for the 8 positive upbeat note that you've landed your 9 presentation on. I'm grateful for that. I like 10 that. Thank you for the report. 11 I've got probably three questions for you. 12 MR. NANJO: Sure. 13 MS. COHEN: So, first, given the backlog of 14 the 124 pending requests, do you think that once the 15 two Tax Counsel IIIs and the Associate Government 16 Program Analyst are on Board that that backlog will 17 be reduced? 18 MR. NANJO: It will start chipping away at 19 that backlog. I think, as I previously mentioned, 20 given the workload BOE has, we're probably somewhere 21 in the neighborhood of six staff low. Maybe a little 22 more than that. 23 So, you know, every -- again, I try to be 24 positive. Thank you for noting that. Every little 25 bit helps. But I think in the grand scheme of 26 things, even given what BOE 1.0 had for the amount of 27 work that BOE 2.0 inherited, we're probably, I would 28 say, at least five attorneys low, and maybe one 9 1 support staff. So that's kind of where we're 2 going. 3 MS. COHEN: How many legal opinions has your 4 team issued this year? 5 MR. NANJO: This year -- I'm looking back at 6 my list. Sorry. There it is. 7 Legal opinions, it would be -- and this is 8 sometimes phone calls, sometimes formal writing, but 9 in the neighborhood of about 130. 10 MS. COHEN: Okay. All right. 11 Are the BOE responsibilities to county 12 assessors being compromised by a lack of personnel in 13 the Legal Division? 14 MR. NANJO: I would say not compromised, but 15 we appreciate the patience that they are giving us. 16 We try to -- we don't necessarily handle 17 everything in date order received. I encourage all 18 the assessors -- I'm probably going to get a lot of 19 phone calls for saying this. But I encourage the 20 assessors' offices to call me and let me know if 21 there's a real date certain that they need to have 22 things by. 23 MS. COHEN: Okay. 24 MR. NANJO: And we try to put those to the 25 top of the list. 26 Very candidly, we try to accommodate the 27 assessors as much as possible, because we know how 28 key our opinions are to a lot of the work they do. 10 1 MS. COHEN: Yeah. 2 So perhaps compromise is too harsh of a word 3 to use. Would you say challenge? Would you say that 4 this challenge -- 5 MR. NANJO: Absolutely. Absolutely. 6 MS. COHEN: Is a challenge? 7 MR. NANJO: Some of our assessors have had 8 to wait several months for us to respond to them. 9 MS. COHEN: It's not highlighted in your 10 report, but what are the other challenges you're 11 experiencing due to staffing issues? 12 MR. NANJO: It's -- a lot of it is just the 13 responsiveness. 14 And I would say -- you know, I -- my staff 15 does a really good job of trying to take the time 16 that's necessary to review documents adequately. So 17 I don't think that the quality of legal advice that 18 you're being given, or that the agency is being 19 given, has been compromised. It really results in 20 the timeframe that it takes for us to actually do our 21 work. 22 I mean, I'd love to be able to respond to 23 these opinion requests, you know, within the month, 24 if necessary, within a couple of weeks. 25 We have had, as I previously mentioned, we 26 have some opinions that are still hanging on from 27 2018. I think we cleared all the 2017 ones. But, 28 you know, when a taxpayer has to wait a year for a 11 1 response, that's a little long. 2 MS. COHEN: Agreed. Okay. 3 I guess my final one you might have answered 4 already, but I'm going to propose it any way. 5 MR. NANJO: Sure. 6 MS. COHEN: Does the Legal Division have any 7 additional personnel needs that were not presented 8 today? 9 MR. NANJO: No. We -- I think I previously 10 mentioned, we can definitely use more support and 11 more staff. Exec staff and Ms. Fleming has been very 12 good about supporting Legal and trying to get us the 13 resources we need. 14 So it's just kind of the same slog that the 15 Property Tax Department has, and the Department as a 16 whole. 17 MS. COHEN: You said something that made me 18 think in your last comment about the backlog being 19 onerous for taxpayers. I'm wondering if there's any 20 financial implications to our delay, either to the 21 taxpayer or to our Department. 22 MR. NANJO: I don't know to our Department. 23 I imagine for some taxpayers this does end up costing 24 them, because they end up having to go to litigation, 25 or not have a matter resolved. And that always ends 26 up in additional costs. 27 MS. COHEN: Okay. Thank you very much. 28 MR. NANJO: Sure. 12 1 MS. COHEN: Colleagues, do you have any 2 other questions for Mr. Nanjo? 3 Okay. We'll start down here. 4 MS. STOWERS: Thank you. 5 Thank you, Mr. Nanjo. 6 I'm noticing that part of your advice is 7 e-mails and phone calls. 8 MR. NANJO: Yes. 9 MS. STOWERS: So I want to comment that you 10 guys are responding to the taxpayers and the tax 11 petitioners. It may be slow, but you're doing your 12 best to respond. 13 MR. NANJO: Yeah. 14 And if I can add to that, Deputy Controller 15 Stowers, one of the things we encourage taxpayers to 16 do is if they can avoid getting a written opinion, if 17 we can help them out by either an e-mail or some 18 quicker format, we obviously let them know that 19 that's a way they can get their answer quicker. So 20 there are options for them. 21 MS. STOWERS: That's perfect. 22 I just want to kind of comment for the 23 record, I had some practitioners expressing a concern 24 that the new BOE was not going to be responding to 25 their inquiries like the prior BOE did. 26 But what you're telling me is that you guys 27 are still here to help and serve the taxpayers, it 28 just takes a little bit more time. 13 1 MR. NANJO: Correct. 2 MS. STOWERS: Then I just wanted to thank 3 you and Mr. Yeung. Because I know I had a 4 practitioner reach out to me saying that he had not 5 received that response yet. And when I wrote you 6 all, and gave you the information, you guys were very 7 timely and detailed in responding to those inquiries. 8 So thank you very much. 9 MR. NANJO: Thank you. 10 MR. VAZQUEZ: I will go ahead, in absence of 11 our Chair. 12 But actually, my question, you mentioned in 13 your opening remarks that we lost a -- I'm assuming 14 it was a senior attorney through retirement. 15 MR. NANJO: Yes. 16 MR. VAZQUEZ: How many years was that 17 individual with us? 18 MR. NANJO: I believe she had 15 -- yeah, 19 approximately 15 years with us. 20 I'm very happy for that person, but the 21 problem was she had 15 years of solid property tax 22 background. So she was one of my -- I mean it in the 23 kindest way -- she was one of my workhorses. So it's 24 really a challenge when you lose somebody like 25 that. 26 MR. VAZQUEZ: That's exactly what I was 27 getting at. 28 MR. NANJO: Yeah. 14 1 MR. VAZQUEZ: So losing that individual, I 2 know you're looking to replace a new attorney. I'm 3 assuming, and I think you hit it already, this 4 individual that you lost was probably doing the work 5 of a couple freshmen attorneys, right? 6 MR. NANJO: Correct. 7 MR. VAZQUEZ: So moving forward -- and you 8 mentioned in your -- so did you -- in your, I guess 9 your request here, you were saying you're still 10 short, what is it, four or five attorneys you're 11 looking at? 12 MR. NANJO: Yes. In the grand scheme of 13 things, we're short -- 14 MR. VAZQUEZ: I mean, in a perfect world, 15 basically. 16 MR. NANJO: Yeah. In a perfect world, we're 17 short probably five or six attorneys, yes. 18 MR. VAZQUEZ: That's what I thought. 19 MR. NANJO: And I'm going to be shortly in 20 the process of back-filling that attorney that 21 retired. 22 The challenge is a lot of times what I find 23 is I lose experience, and I gain somebody who may 24 have a little bit of experience, or somebody who is 25 good, but needs training. And it takes an attorney, 26 depending on what their background is, anywhere from 27 a year to two or three years to really come up to 28 speed and be able to work at full horsepower, if you 15 1 will. 2 MR. VAZQUEZ: Yeah, that's what I'm 3 thinking. Because I'm sure property tax is a pretty 4 specific and unique -- 5 MR. NANJO: Yeah. 6 MR. VAZQUEZ: -- quality that you need in an 7 attorney, right? 8 MR. NANJO: Yeah. And they just don't have 9 the experience, because we're kind of coming at it 10 from a relatively unique standpoint, if you will. 11 MR. VAZQUEZ: All right. 12 And I know -- I think it was Member Gaines 13 that had some questions. 14 MR. GAINES: Yeah. Thank you. 15 MR. NANJO: Thank you. 16 MR. GAINES: I wanted to focus, again, on 17 the number of positions. It's five positions that 18 we're looking for? 19 MR. NANJO: Yes. 20 MR. GAINES: Okay. 21 MR. NANJO: In an ideal world, I don't have 22 them yet, but I'd love to have them. And I think 23 with five positions I would be able to keep up with 24 the workload that BOE has. 25 MR. GAINES: Okay. 26 And where are we in progression of filling 27 those positions? 28 MR. NANJO: I have two that are in 16 1 recruitment right now. I have one that we're going 2 to start recruitment within the next few weeks. And 3 then the others, I think we need to -- I'm always 4 asking Ms. Fleming for an opportunity to make a pitch 5 for more positions if possible. 6 MR. GAINES: Yeah. And should I be speaking 7 to the ED as it relates to this, or -- 8 MR. NANJO: I think she's been supportive. 9 MR. GAINES: Okay. 10 MR. NANJO: So, yeah -- and I appreciate the 11 Board Members support of the Legal Department. Every 12 time I've talked to you either individually or in 13 this type of setting, you've been more than 14 supportive. It's -- it's the same problem, in my 15 humble opinion -- 16 MR. GAINES: It's okay to speak to you about 17 personnel? I guess that's the clarification I'm 18 looking for. 19 MS. FLEMING: So, yes. Let's have that 20 directed to our -- 21 MR. NANJO: Yeah. That can -- those 22 details -- I can give you the general status. For 23 those details, you should go with Ms. Fleming. 24 MR. GAINES: Yeah. All right. Very well. 25 And maybe Ms. Fleming can help in terms of 26 timeline for hiring. Sounds like we have a couple of 27 recruits, and we have a third one that you're looking 28 at. So do we have a timeline in terms of that 17 1 process? I don't want to lose folks -- 2 MR. NANJO: Right. 3 MR. GAINES: -- because we take too long in 4 getting through the process. So I don't know if 5 that'd be better directed through the ED or for -- 6 MR. VAZQUEZ: How do we expedite, right? 7 MR. GAINES: Yes. 8 MS. FLEMING: So, yes. One of the things 9 that we can do is start to provide, as we're 10 itemizing the recruitments that are in process, we 11 can provide you a summary of where they are in the 12 process, in the general timeline. So that you get 13 some sense of maybe the target hire date. They're 14 not always 100 percent absolute, but we can provide a 15 summary of that information. 16 MR. GAINES: That would be helpful if you 17 could provide that for us. I don't know if -- could 18 that happen during this meeting today, or is that 19 something that you'd have to get back -- 20 MS. FLEMING: I'd have to get back to you on 21 that. 22 MR. GAINES: Okay. If you'd let us all 23 know, that'd be great. 24 MS. FLEMING: Mm-hm. Will do. 25 MR. GAINES: Good. Thank you. 26 MR. NANJO: Thank you. 27 Anything else? 28 MS. COHEN: Does this conclude your 18 1 presentation? 2 MR. NANJO: Yes, it does. 3 MS. COHEN: Thank you. 4 Colleagues, are there any other questions? 5 Thank you. 6 MR. NANJO: Thank you. 7 MR. GAINES: Thank you. 8 ---o0o--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 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 October 22, 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 19 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: November 7, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 20