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2003 MINUTES OF THE STATE BOARD OF EQUALIZATION 447

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2003 MINUTES OF THE STATE BOARD OF EQUALIZATION 447
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
447
Thursday, December 4, 2003
The Board met at its offices at 450 N Street, Sacramento, at 9:37 a.m., with
Ms. Migden, Chairwoman, Mr. Parrish, Vice Chairman, Mr. Leonard and Mr. Chiang present,
Ms. Mandel present on behalf of Mr. Westly in accordance with Government Code section 7.9.
SALES AND USE TAX APPEALS HEARINGS
Rima Naif Hamati, 132983
7-1-96 to 12-31-98, $00.00 Tax, $00.00 Penalty
For Petitioner:
Mark Goshgorian, Attorney
For Sales and Use Tax Department:
Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Issues resolved by all parties.
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
ordered that the petition be redetermined as recommended by the Appeals Division.
PUBLIC HEARINGS
Timber Yield Tax Rate
David Hayes, Manager, Research and Statistics Section, made introductory
remarks regarding the 2004 Timber Yield Tax Rate (Exhibit 12.1).
Action:
Upon motion of Mr. Leonard, seconded by Mr. Parrish and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
adopted the 2004 Timber Yield Tax Rate of 2.9 as recommended by staff.
Exhibits to these minutes are incorporated by reference.
Timber Harvest Values
Mickie Stuckey, Chief, County Property Tax Division, Property and Special
Taxes Department, made introductory remarks regarding the January 1-June 30, 2004 Timber
Harvest Values (Exhibit 12.2).
Action:
Upon motion of Mr. Leonard, seconded by Ms. Mandel and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
adopted the January 1-June 30, 2004 Timber Harvest Values as recommended by staff.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS,
ADJUDICATORY
Maryanne Avila, 192141
1998, $160.00 Tax, $40.00 Late Filing Penalty
Considered by the Board: August 6, 2003
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
448
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Action:
Upon motion of Ms. Migden, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
granted separate liability relief from joint and several liability for the proposed assessment on
appeal.
OII Third Partial Consent Decree Cash Acct. Escrow, 139239
1992, $2,843.00 Tax, $1,421.50 Late Filing and Failure to File Penalties
1993, $9,558.00 Tax, $4,779.00 Late Filing and Failure to File Penalties
1994, $12,067.00 Tax, $6,033.50 Late Filing and Failure to File Penalties
1995, $28,707.00 Tax, $14,353.50 Late Filing and Failure to File Penalties
1996, $36,273.00 Tax, $18,136.50 Late Filing and Failure to File Penalties
1997, $37,007.00 Tax, $18,503.50 Late Filing and Failure to File Penalties
Considered by the Board: September 11, 2003
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
The Board deferred consideration of this matter to the January 2004 Board
Meeting.
LEGAL APPEALS MATTERS, CONSENT
With respect to the Legal Appeals Matters Consent Agenda, upon a single
motion of Mr. Parrish, seconded by Mr. Chiang and unanimously carried, Ms. Migden,
Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board made the following
orders:
Delta–T Systems, Inc., 153924
10-1-97 to 6-30-01, $10,933.25 Tax
Action:
Redetermine as recommended by the Appeals Division.
Computerlogic, Inc., 132989
7-1-91 to 12-31-99, $00.00 Tax
Action:
Redetermine as recommended by the Appeals Division.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS, CONSENT
Jr., 186286.
The Board deferred consideration of the following matter: Maurice A. Mayben,
With respect to the Corporate Franchise and Personal Income Tax Matters
Consent Agenda, upon a single motion of Mr. Parrish, seconded by Mr. Leonard and
unanimously carried, Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting
yes, the Board made the following orders:
Debra K. Cash, 209439
2000, $1,117.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
449
Thursday, December 4, 2003
Dan Dougherty, 208821
2000, $1.00 or more Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Anne P. Foster, 215891
1998, $1,417.75 Penalties, $180.00 Fees, $516.60 Interest
Action:
Sustain the action of the Franchise Tax Board.
Tami Garrett (Johns), 202097
1995 and 1996, $1,314.40 Claim for Refund
Action:
Modify the action of the Franchise Tax Board.
Peter C. Ogudo, 202126
1999, $456 .00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Donald M. Rosenthal, 216900
1987, $1.00 or more Assessment
1988, $1.00 or more Assessment
1989, $1.00 or more Assessment
1990, $1.00 or more Assessment
Action:
Appeal dismissed for failure of jurisdiction.
Richard D. Sherrets, 169670
1985, $7,560.79 Assessment
1986, $8,207.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Ezell and Janet Smith, 217753
1999, $2,019.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Charles E. Travis, 195669
1999, $5,937.00 Tax, $1,484.55 Late Filing Penalty
Action:
Sustain the action of the Franchise Tax Board and impose a $500.00 frivolous
appeal penalty.
Kimberly J. Tyler, 213517
1989, $3,518.40 Assessment
1994, $1,005.18 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Paul T. Vuu, 219564
2000, $912.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
450
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
William C. Wong, 213364
2000, $1,453.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Hernan A. Jacobo, 172837
1999,$1,705.00 Tax, $852.50 Penalties
Action:
Deny the petition for rehearing.
Arnold I. and Rona K. L. Mandel, 186853
1991, $1,347.00 Claim for Refund
Action:
Deny the petition for rehearing.
Maurice A. Mayben, Jr., 186286
1999, $1,257.00 Tax, $1,561.25 Penalty
Action:
The Board deferred consideration of this matter.
Carl E. Nuesch and Kathleen K. Gulf, 188462
1998, $4,445.00 Assessment
Action:
Deny the petition for rehearing.
Warren W. Quann, 162821
1992, $3,168.00 Assessment
Action:
Deny the petition for rehearing.
Rick Schotts, Jr., 202277
1999, $16,417.00 Assessment
Action:
Deny the petition for rehearing.
Mark E. Stamos, 167885
1999, $1,341.00 Tax, $167.14 Penalty, $269.58 Interest
Action:
Deny the petition for rehearing.
HOMEOWNER AND RENTER PROPERTY TAX ASSISTANCE MATTERS, CONSENT
With respect to the Homeowner and Renter Property Tax Assistance Matters
Consent Agenda, upon a single motion of Mr. Parrish, seconded by Mr. Leonard and
unanimously carried, Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting
yes, the Board made the following orders:
George F. Beardon, 209529
1999, $347.50 Claim for Credit
2000, $347.50 Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
Lana Horton, 208929
2002, $297.50 Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
451
Thursday, December 4, 2003
Frank J. Lescrinier, 221582
2002, $1.00 or more Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
Patsy Mays, 218663
2002, $1.00 or more Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
Harbhajan S. Parhar, 218292
2002, $1.00 or more Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
Daniel L. Perez, 218289
2002, $1.00 or more Claim for Credit
Action:
Sustain the action of the Franchise Tax Board.
SALES AND USE TAX MATTERS, REDETERMINATIONS, RELIEF OF PENALTIES,
DENIALS OF CLAIMS FOR REFUND AND DENIALS OF RELIEF OF PENALTIES,
CONSENT
With respect to the Sales and Use Tax Matters, Redeterminations, Relief of
Penalties, Denials of Claims for Refund and Denials of Relief of Penalties, Consent Agenda,
upon a single motion of Mr. Parrish, seconded by Ms. Migden and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, Mr. Chiang not
participating in Corning Incorporated, 206440; Ms. Mandel not participating in VW Credit
Leasing, Ltd., 242486; Piercey North, Inc., 224043; and, Ford Credit Titling Trust,
220309, the Board made the following orders:
Tomaxusa.com, 207941
1-1-99 to 12-31-99, $55,520.77
Action:
Approve the redetermination as recommended by staff.
Brooks Brothers, Inc., 217893
7-1-98 to 6-30-01, $58,811.98
Action:
Approve the redetermination as recommended by staff.
99 Cents Only Stores, 242831
7-1-03 to 7-31-03, $128,491.86
Action:
Approve the relief of penalty as recommended by staff.
VW Credit Leasing, Ltd., 242486
1-1-03 to 3-31-03, $195,265.30
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating.
452
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Piercey North, Inc., 224043
10-1-02 to 12-31-02, $53,501.50
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating.
Helena Chemical Company, 242822
7-1-02 to 9-30-02, $53,331.21
Action:
Approve the relief of penalty as recommended by staff.
Independent Electric Supply, Inc., 222771
10-1-02 to 10-31-02, $68,520.00
Action:
Approve the relief of penalty as recommended by staff.
De Lage Landen Oprtnl Services, LLC, 222631
1-1-03 to 1-31-03, $56,399.52
Action:
Approve the relief of penalty as recommended by staff.
FCI Constructors, Inc., 220978
2-1-03 to 2-28-03, $63,203.76
Action:
Approve the relief of penalty as recommended by staff.
Microsoft Corporation, 242849
1-1-03 to 3-31-03, $207,269.43
Action:
Approve the relief of penalty as recommended by staff.
Ford Motor Credit Company, 220396
1-1-02 to 12-31-02, $656,284.50
Action:
Approve the relief of penalty as recommended by staff.
GTE Communication Systems Corporation, 243042
1-1-02 to 3-31-02, $138,728.40
Action:
Approve the relief of penalty as recommended by staff.
Ford Credit Titling Trust, 220309
1-1-02 to 12-31-02, $1,466,285.00
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating.
Maersk Equipment Service Company, Inc., 242967
10-1-00 to 12-31-00, $50,091.30
Action:
Approve the relief of penalty as recommended by staff.
County Sanitation Dist. #2 L.A. Co., 79130
4-1-97 to 3-31-98, $3,599,763.19
Action:
Approve the denial of claim for refund as recommended by staff.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
453
Thursday, December 4, 2003
Toyota Motor Credit Corporation, 243089
4-1-01 to 12-31-01, $1,675,781.55
Action:
Approve the denial of claim for refund as recommended by staff.
Corning Incorporated, 206440
10-1-02 to 12-31-02, $92,019.83
Action:
Approve the denial of claim for refund as recommended by staff. Mr. Chiang not
participating.
Media.Net Communications, Inc., 243161
1-1-00 to 3-31-03, $161,608.69
Action:
Approve the denial of claim for refund as recommended by staff.
The Sleep Train, Inc., 242653
1-1-03 to 3-31-03, $78,375.80
Action:
Approve the denials of relief of penalties as recommended by staff.
UAG Cerritos, LLC, 235809
1-1-03 to 3-31-03, $90,409.10
Action:
Approve the denials of relief of penalties as recommended by staff.
SALES AND USE TAX MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
With respect to the Sales and Use Tax Matters, Credits, Cancellations and
Refunds, Consent Agenda, upon a single motion of Mr. Chiang, seconded by Mr. Parrish and
unanimously carried, Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting
yes, Ms. Mandel not participating in Ford Motor Company, 241954; and Lockheed Martin
Corporation, 29358, the Board made the following orders:
Corporate Software & Technology, 241806
4-1-02 to 9-30-02, $155,257.00
Action:
Approve the credit and cancellation as recommended by staff.
Angelica Garcia Iniguez, 241577
1-1-00 to 11-14-02, $139,769.98
Action:
Approve the credit and cancellation as recommended by staff.
Toyota Motor Credit Corporation, 110565
1-1-98 to 3-31-01, $4,030,451.95
Action:
Approve the refund as recommended by staff.
Bestal Corporation, 168211
1-1-99 to 12-31-01, $52,500.62
Action:
Approve the refund as recommended by staff.
454
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Sigma Designs, Inc., 235508
10-1-99 to 9-30-02, $71,470.68
Action:
Approve the refund as recommended by staff.
E.R. Squibb & Sons, Inc., 241658
10-1-99 to 6-30-00, $64,755.93
Action:
Approve the refund as recommended by staff.
Olympus America, Inc., 132191
4-1-01 to 6-30-01, $80,052.01
Action:
Approve the refund as recommended by staff.
Webcraft Technologies, Inc., 241117
10-1-00 to 12-31-00, $103,358.17
Action:
Approve the refund as recommended by staff.
CIT Technologies Corporation, 207565
1-1-00 to 6-30-02, $51,946.77
Action:
Approve the refund as recommended by staff.
Thomson Multimedia, Inc., 209378
1-1-98 to 12-31-00, $86,988.52
Action:
Approve the refund as recommended by staff.
Ford Motor Company, 241954
4-1-03 to 8-31-03, $272,782.10
Action:
Approve the refund as recommended by staff. Ms. Mandel not participating.
Countrywide Home Loans, Inc., 134235
1-1-01 to 12-31-01, $105,225.25
Action:
Approve the refund as recommended by staff.
Countrywide Home Loans, Inc., 233381
1-1-02 to 9-30-02, $182,338.82
Action:
Approve the refund as recommended by staff.
Ross Products Division, Abbott Lab., Inc., 168640
4-1-98 to 5-1-01, $64,287.02
Action:
Approve the refund as recommended by staff.
J.R. Simplot Company, 240630
10-1-02 to 12-31-02, $142,508.24
Action:
Approve the refund as recommended by staff.
Publishers Data Services, Inc., 238520
4-1-03 to 6-30-03, $72,152.40
Action:
Approve the refund as recommended by staff.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
455
Thursday, December 4, 2003
Media.Net Communications, Inc., 216174
1-1-00 to 3-31-03, $52,334.80
Action:
Approve the refund as recommended by staff.
Sirenza Microdevices, Inc., 241182
7-1-99 to 6-30-02, $75,637.14
Action:
Approve the refund as recommended by staff.
Exodus Communications, Inc., 234103
7-1-01 to 9-30-01, $504,920.24
Action:
Approve the refund as recommended by staff.
Fetzer’s, Inc., 241943
1-1-01 to 3-31-03, $128,695.77
Action:
Approve the refund as recommended by staff.
S. B. Restaurant Company, 223465
7-1-02 to 9-29-02, $72,287.38
Action:
Approve the refund as recommended by staff.
Philips Electronics NA Corporation, 116398
7-1-00 to 3-31-01, $91,533.89
Action:
Approve the refund as recommended by staff.
Lockheed Martin Corporation, 29358
4-1-99 to 6-30-96, $1,706,749.93
Action:
Approve the refund as recommended by staff. Ms. Mandel not participating.
Concur Technologies, Inc., 217748
10-1-02 to 12-31-02, $63,982.81
Action:
Approve the refund as recommended by staff.
CHIEF COUNSEL MATTERS
RULEMAKING (SALES AND USE TAX)
Section 100 Change to Sales and Use Tax Regulation
Janice Thurston, Assistant Chief Counsel, Business Tax Section, Legal Division,
made introductory remarks regarding the request for a section 100 change to Sales and Use Tax
Regulation 1621, Sales to Common Carriers (Exhibit 12.3).
Action:
Upon motion of Mr. Leonard, seconded by Mr. Parrish and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
approved the section 100 change to Sales and Use Tax Regulation 1621, Sales to Common
Carriers.
456
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
The Board directed staff to work with the Legislature should there be efforts to
accelerate the exemption period.
Proposed Adoption of Amendments to Sales and Use Tax Regulation 1591,
Medicines and Medical Devices
Janice Thurston, Assistant Chief Counsel, Business Tax Section, Legal Division,
made introductory remarks regarding the adoption of amendments to Sales and Use Tax
Regulation 1591, Medicines and Medical Devices. Ms. Thurston stated that Regulation 1591
is proposed to be amended to interpret, implement and make specific Revenue and Taxation Code
section 6369. Amendments are proposed to provide that sales of breast and tissue expanders are
exempt from tax under defined conditions (Exhibit 12.4).
Speakers:
Eric Miethke, Partner, Nielsen, Merksamer, representing Intamint Corporation.
Action:
Upon motion of Mr. Leonard, seconded by Ms. Mandel and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
approved the section 100 change to Sales and Use Tax Regulation 1591, Medicines and
Medical Devices.
Ms. Migden stated for the record that she would like to recognize the importance
and the significance of Regulation 1591 and thank those who have works so hard to amend this
regulation. This matter is very worthy of the Board’s attention to alleviate or minimize the
suffering to those with health burdens.
RULEMAKING (PROPERTY TAXES)
Kristine Cazadd, Assistant Chief Counsel, Property Tax Section, Legal Division,
made introductory remarks regarding four petitions for rulemaking action – amendments to
property tax rules – received on September 29, 2003, from the California Assessors’ Association
(Exhibit 12.5).
Property Tax Rule 21, Taxable Possessory Interests – Valuations
Speakers:
David Brown, Yuba County Assessor
Thomas R. Parker, Deputy County Counsel, El Dorado County
Rick Auerbach, Los Angeles County Assessor
Eric Miethke, Partner, Nielson, Merksamer, representing the Air Transportation
Association
Louie Brown, Western Fairs Association
Greg Turner, General Counsel, California Taxpayers’ Association
Action:
Upon motion of Ms. Mandel, seconded by Mr. Parrish and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
ordered to deny the petition to amend subsection (d)(1) of Property Tax Rule 21, Taxable
Possessory Interests - Valuations.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
457
Thursday, December 4, 2003
Property Tax Rule 138, Exemption for Aircraft Being Repaired, Overhauled,
Modified or Serviced
Speakers:
Rick Auerbach, Los Angeles County Assessor
Thomas R. Parker, Deputy County Counsel, El Dorado County
David Brown, Yuba County Assessor
Eric Miethke, Partner, Nielsen, Merksamer, representing the Air Transportation
Associaiton
Greg Turner, General Counsel, California Taxpayers’ Association
Ms. Mandel read into the record the following statement of Steve Westly, State
Controller: “Let me state and be very clear up front, any vote that the controller may cast to send
one of these rules to the Property Tax Committee, Interested Parties process, is absolutely not a
substantive judgement at this time on his part as to the merits of the petition or the assertions
made by the county assessors.”
Action:
Upon motion of Ms. Mandel, seconded by Mr. Parrish and duly carried,
Ms. Migden, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Leonard voting no, the
Board ordered that Property Tax Rule 138, Exemption for Aircraft Being Repaired,
Overhauled, Modified or Serviced, be sent to the Property Tax Committee, Interested Parties
process, to discuss the issues that were raised in the petition with the express direction that a
prospective operative date be included, should that process result in any recommended or
suggested rule change by staff or any other party.
Property Tax Rule 461, Real Property Value Changes
Speakers:
David Brown, Yuba County Assessor
Thomas P. Parker, Deputy County Counsel, El Dorado County
Rich Auerback, Los Angeles County Assessor
Richard, J. Ayoob, Attorney, Ajalat, Polley & Ayoob, representing BP US West
Coast Products
Greg Turner, General Counsel, California Taxpayers’ Association
John Despotakis, Tax Manager, Apple Computer Inc.
Action:
Upon motion of Ms. Mandel, seconded by Mr. Parrish and duly carried,
Ms. Migden, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Leonard voting no, the
Board ordered that Property Tax Rule 461, Real Property Value Changes, be sent to
Property Tax Committee, Interested Parties process, to discuss the issues that were raised in the
petition with the express direction that the Board’s action on the petition is not to be interpreted
as an endorsement of the petition or the assessors’ position and is not an indication one way or the
other with respect to the matters in litigation or that the rule does not have any current binding
affect.
Property Tax Rule 305.3, Application for Equalization Under Revenue and Taxation
Code section 469
Speakers:
Rich Auerback, Los Angeles County Assessor
Thomas P. Parker, Deputy County Counsel, El Dorado County
David Brown, Yuba County Assessor
John Despotakis, Tax Manager, Apple Computer Inc.
458
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Action:
Upon motion of Mr. Leonard, seconded by Ms. Mandel and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
ordered that Property Tax Rule 305.3, Application for Equalization Under Revenue and
Taxation Code section 469, be sent to the Property Tax Committee, Interested Parties process,
to discuss the issues that were raised in the petition with the same express direction with respect
to the motion on Rule 461 and that the issue of low value ordinance statutes be considered in
conjunction with the Interested Parties meetings.
PROPERTY TAXES HEARINGS
Otay Mesa Generating Facility, LLC (1134), 223878
2003, $117,400,000.00 Unitary Value
Pastoria Energy Facility, LLC (1131), 223879
2003, $503,100,000.00 Unitary Value
Metcalf Energy Center, LLC (1133), 223880
2003, $108,000,000.00 Unitary Value
For Petitioner:
Appearance Waived
For Property and Special Taxes Department:
Anthony Epolite, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: No disqualifying
contributions were disclosed.
Issues:
Whether the Board of Equalization has the jurisdiction to assess the Petitioners’
properties.
Whether the Board’s assessment of the Petitioners’ properties violates article
XIII A of the California Constitution.
Whether the Board’s determination of value under the Replacement Cost New
Less Depreciation value indicator is unreliable due to the economic obsolescence suffered by the
Petitioners’ facilities, such that the facilities should be valued based upon a 75-percent weighting
to the income approach.
Whether the Board overvalued the Petitioners’ land by including soft costs in its
valuation of this property.
Action:
Upon motion of Mr. Leonard, seconded by Ms. Migden and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Mr. Westly absent, the Board
ordered that the 2003 unitary value of Otay Mesa Generating Facility, LLC (1134), 223878,
be reduced to $80,900,000.00, Pastoria Energy Facility, LLC (1131), 223879, be reduced to
$335,000,000.00, and Metcalf Energy Center, LLC (1133), 223880, be reduced to
$71,500,000.00 as recommended by staff.
Delta Energy Center, LLC (1128), 223881
2003, $563,700,000.00 Unitary Value
Calpine Construction Finance Company, LP (1132), 223882
2003, $331,700,000.00 Unitary Value
For Petitioner:
Appearance Waived
For Property and Special Taxes Department:
Anthony Epolite, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: No disqualifying
contributions were disclosed.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
459
Thursday, December 4, 2003
Issues:
properties.
Whether the Board of Equalization has the jurisdiction to assess the Petitioners’
Whether the Board’s assessment of the Petitioners’ properties violates article
XIII A of the California Constitution.
Whether the Board’s determination of value under the Replacement Cost New
Less Depreciation value indicator properly reflects the fair market value of the Petitioners’
facilities.
Whether the Board overvalued the Petitioners’ land by including soft costs in its
valuation of these properties.
Whether the Board’s valuation of the Petitioners’ facilities should be based upon
a 75 percent weighting to the income approach.
Action:
Mr. Parrish moved to reduce the 2003 unitary value of Delta Energy Center,
LLC (1128), 223881, to $416,700,000.00. The motion failed for lack of a second.
Upon motion of Ms. Migden, seconded by Mr. Westly and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board ordered
that the 2003 unitary value of Delta Energy Center, LLC (1128), 223881, be reduced to
$519,100,000.00, and Calpine Construction Finance Company, LP (1132), 223882, be
reduced to $320,400,000.00 as recommended by staff.
Cabrillo Power II, LLC (1107), 224892
2003, $48,000,000.00 Unitary Value
For Petitioner:
Peter Michaels, Attorney
Dan Tobias, Accountant
For Property and Special Taxes Department:
Michael Lebeau, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the State Board of Equalization has the jurisdiction to assess the
Petitioner’s electrical generation facilities.
Whether the Board’s Replacement Cost New value indicator was erroneous and
excessive considering the property’s physical age and functional and external obsolescence.
Whether the Board staff correctly calculated the land value of the Petitioner’s
facility.
Whether the Board staff’s Replacement Cost New factor of $758,000 per
megawatt of rated capacity was excessive for the 2003 lien date.
Whether the Board included costs related to the construction of exempt assets in
the 2003 Board-adopted unitary value.
Whether the Board should have considered the CEA (income) value indicator
when appraising the Petitioner’s property.
Whether the Board should close the oral hearing to the public when discussing
the Petitioner’s confidential or proprietary business information.
Action:
Upon motion of Mr. Leonard, seconded by Mr. Chiang and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board ordered
that the 2003 unitary value be reduced to $15,200,000.00 as recommended by staff.
460
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Long Beach Generation, LLC (1111), 225286
2003, $44,900,000.00 Unitary Value
For Petitioner:
Peter Michaels, Attorney
Dan Tobias, Accountant
For Property and Special Taxes Department:
Michael Lebeau, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the State Board of Equalization has the jurisdiction to assess the
Petitioner’s electrical generation facilities.
Whether the Board’s Replacement Cost New value indicator was erroneous and
excessive considering the property’s physical age and functional and external obsolescence.
Whether the Board staff correctly calculated the land value of the Petitioner’s
facility.
Whether the Board staff’s Replacement Cost New factor of $412,000 per
megawatt of rated capacity was excessive for the 2003 lien date.
Whether the Board included costs related to the construction of exempt assets in
the 2003 Board-adopted unitary value.
Whether the Board staff’s Income value indicator is erroneous and excessive, and
must be corrected and reduced.
Whether the Board should close the oral hearing to the public when discussing
the Petitioner’s confidential or proprietary business information.
Action:
Upon motion of Mr. Leonard, seconded by Mr. Westly and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board ordered
that the 2003 unitary value be reduced to $28,200,000.00 as recommended by staff.
PUBLIC COMMENT
The following list of speakers made public comment on AES Alamitos, LLC
(1100), 222549; AES Redondo Beach, LLC (1101), 222550; AES Huntington Beach,
LLC (1102), 222551; and, AES Placerita, Inc. (1146), 224763.
Speakers:
David Elder, Consultant, City of Long Beach
Carol A. Shaw, Deputy City Attorney, City of Long Beach
Lou Garcia, City Manager, City of Redondo Beach
Shari Freidenrich, City Treasurer, City of Huntington Beach
PROPERTY TAXES HEARINGS
AES Alamitos, LLC (1100), 222549
2003, $629,000,000.00 Unitary Value
AES Redondo Beach, LLC (1101), 222550
2003, $423,000,000.00 Unitary Value
AES Huntington Beach, LLC (1102), 222551
2003, $260,700,000.00 Unitary Value
AES Placerita, Inc. (1146), 224763
2003, $45,700,000.00 Unitary Value
For Petitioner:
Cris K. O’Neall, Attorney
Wade E. Norwood, Attorney
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
461
Thursday, December 4, 2003
For Property and Special Taxes Department:
Anthony Epolite, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the Board of Equalization has the jurisdiction to assess the Petitioners’
property.
Whether the Board’s assessment of the Petitioners’ property violates article
XIII A of the California Constitution.
Whether the Petitioners’ facilities should be valued using $459,200 per megawatt
as the replacement cost new under the Replacement Cost New Less Depreciation (ReplCLD)
value indicator.
Whether the Board properly determined an allowance for the physical
depreciation of the Petitioners’ facilities under the ReplCLD value indicator.
Whether the Board underestimated the economic obsolescence suffered by the
Petitioners’ facilities.
Whether the Board overvalued the Petitioners’ land by including soft costs in its
valuation of this property.
Whether the Board utilized a proper capitalization rate to value the Petitioners’
facilities.
Additional issues in the petitions of 222549, 222550, and 222551:
Whether the Board underestimated the functional obsolescence suffered by the
Petitioners’ facilities.
Whether the Board overestimated the net income of the Petitioners’ facilities.
Whether the Board underestimated the Petitioners’ operating expenses.
Whether the Board erred in its valuation of the Petitioners’ property in the
weighting given to the ReplCLD value indicator and the Capitalized Earning Ability (CEA) value
indicator.
Additional issue in the petition of 222551:
Whether the Board’s valuation of AES Huntington improperly included the
valuation of a 19-acre parcel owned by an affiliated company. (This issue relates to AES
Huntington only.)
Additional issues in the petition of 224763:
Whether the Board’s valuation of the Petitioner’s facility should include a
reliance upon the CEA value indicator.
Whether the Board should place more reliance on the CEA value indicator than
the ReplCLD value indicator when valuing the Petitioner’s property.
Action:
Upon motion of Ms. Migden and unanimously carried, Ms. Migden, Mr. Parrish,
Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board ordered that the petition be
submitted for decision.
West Coast P.C.S. (2745), 224225
2003, $66,800,000.00 Unitary Value
For Petitioner:
Appearance Waived
For Property and Special Taxes Department:
Michael Lebeau, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether the Board included the costs attributable to exempt property in the 2003
Board-adopted unitary value of the Petitioner’s property.
462
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Whether the Board’s Replacement Cost value indicator was contrary to the
principles outlined in the Unitary Valuation Methods manual and fails to account for the
obsolescence of the Petitioner’s property.
Whether the Board should close the oral hearing to the public when discussing
the Petitioner’s confidential or proprietary business information.
Action:
Upon motion of Mr. Leonard, seconded by Ms. Migden and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Westly voting yes, Mr. Chiang not participating,
the Board ordered that the 2003 unitary value be reduced to $60,900,000.00 as recommended by
staff.
SPECIAL TAXES MATTERS, REFUNDS, CONSENT
With respect to the Special Taxes Matters, Refunds, Consent Agenda, upon a
single motion of Mr. Chiang, seconded by Mr. Leonard and unanimously carried, Ms. Migden,
Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, Mr. Parrish not participating, the Board
made the following orders:
Shell Oil Company, 240786
2-1-95 to 6-30-98, $341,591.78
Action:
Approve the refund as recommended by staff. Mr. Parrish not participating.
Coastal West Ventures, Inc., 89000006440
1-1-96 to 1-31-96, $196,089.39
Action:
Approve the refund as recommended by staff. Mr. Parrish not participating.
Tosco Corporation, 93404
4-1-97 to 12-31-99, $659,302.38
Action:
Approve the refund as recommended by staff. Mr. Parrish not participating.
Smart & Final Stores Corporation, 243772
9-1-03 to 9-30-03, $94,697.34
Action:
Approve the refund as recommended by staff. Mr. Parrish not participating.
San Diego Unified Port Dist., 238576
1-1-02 to 12-31-02, $98,551.52
Action:
Approve the refund as recommended by staff. Mr. Parrish not participating.
SPECIAL TAXES MATTERS, RELIEF OF PENALTIES, CONSENT
With respect to the Special Taxes Matters, Relief of Penalties, Consent Agenda,
upon a single motion of Mr. Westly, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board made
the following orders:
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
463
Thursday, December 4, 2003
W.A. Dwelle, Inc., 235093
1-1-03 to 5-31-03, $430,207.81
Action:
Approve the relief of penalty as recommended by staff.
Nationwide Life Insurance Company, 235235
1-1-03 to 12-31-03, $160,655.00
Action:
Approve the relief of penalty as recommended by staff.
Upon motion of Ms. Migden, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Leonard and Mr. Chiang voting yes, Mr. Parrish and Mr. Westly not
participating, the Board made the following order:
21st Century Insurance Company, 223989
1-1-02 to 12-31-02, $144,000.00
Action:
Approve the relief of penalty as recommended by staff. Mr. Parrish and
Mr. Westly not participating.
PROPERTY TAX MATTERS, ADJUDICATORY
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Petitions for Reassessment of Unitary Value
Verizon California, Inc. (201), 224740
2003, $3,562,900,000.00 Unitary Value
Action:
Deferred consideration of this matter to latter in the day.
Ms. Migden requested that procedures be implemented to ensure that
contribution disclosure forms are sent to the correct taxpayers and/or representatives.
Sierra Railroad Company (871), 225247
2003, $941,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $382,000.00 as recommended by staff.
Duke Energy Moss Landing, LLC (1103), 225284
2003, $981,800,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $915,700,000.00 as recommended by staff.
Duke Energy Morro Bay, LLC (1104), 225287
2003, $106,700,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $94,000,000.00 as recommended by staff.
464
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Duke Energy Oakland, LLC (1105), 224880
2003, $14,200,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $10,600,000.00 as recommended by staff.
Mirant Potrero, LLC (1108), 224116
2003, $106,300,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $49,300,000.00 as recommended by staff.
Mirant Delta, LLC (1109), 224114
2003, $521,300,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $313,100,000.00 as recommended by staff.
Duke Energy South Bay, LLC (1118), 224889
2003, $73,100,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board denied
the petition for reassessment of 2003 unitary value as recommended by staff.
Teleglobe USA, Inc. (7760), 224606
2003, $22,400,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $3,910,000.00 as recommended by staff.
Petition for Reassessment and Penalty Abatement on 2003 Unitary Value
Advance Telcom Group, Inc. (7813), 224023
2003, $16,000,000.00 Unitary Value, $1,600,000.00 Penalty
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced unitary value of $2,400,000.00 as recommended by staff and abated the
penalty.
Petitions for Reassessment of Nonunitary Value
Southern California Gas Company, (149), 239992
2003, $114,383,100.00 Nonunitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Mr. Westly not participating,
the Board approved the reduced nonunitary value of $72,950,765.00 as recommended by staff.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
465
Thursday, December 4, 2003
Union Pacific Railroad Company (843), 239981
2003, $493,727,194.00 Nonunitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly voting yes, the Board
approved the reduced nonunitary value of $473,592,976.00 as recommended by staff.
Petition for Correction of Allocated Assessment
Elk Hills Power, LLC (1126), 225289
2003, $311,400,000.00 Unitary Value
Action:
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Mr. Westly not participating,
the Board approved the reallocation of 2003 unitary value as recommended by staff.
PROPERTY TAX MATTERS NOT SUBJECT TO CONTRIBUTION DISCLOSURE
STATUTE
Audits
San Diego Gas and Electric Company (141)
2002, $8,890,000.00 Escaped Assessment, $147,115.00 Penalty, $220,673.00 In-Lieu Interest
2001, $555,000.00 Escaped Assessment
2000, $191,000,000.00 Escaped Assessment, $18,325,372.00 Penalty, $60,473,729 In-Lieu
Interest
Action:
Upon motion of Mr. Leonard, seconded by Mr. Parrish and unanimously carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Mr. Westly not participating,
the Board ordered the penalties be abated otherwise adopted the escaped assessments and interest
as recommended by staff.
Global Crossing Telecommunications, Inc. (2207)
2001, $29,400,000.00 Escaped Assessment, $2,940,000.00 Penalty, $7,056,000.00 In-Lieu
Interest
2000, $6,250,000.00 Escaped Assessment, $625,000. 00 Penalty, $2,062,500.00 In-Lieu Interest
Action:
Upon motion of Mr. Leonard, seconded by Mr. Westly and duly carried,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Westly voting yes, Mr. Chiang voting no, the
Board adopted the escaped assessment, penalty and interest as recommended by staff.
Cox Communications PCS, L.P. (2720)
2002, $2,080,000.00 Escaped Assessment, $208,000.00 Penalty, $312,000.00 In-Lieu Interest
2001, $18,200,000.00 Escaped Assessment, $1,820,000.00 Penalty, $4,368,000.00 In-Lieu
Interest
2000, ($4,464,100.00) Excessive Assessment
1999, $55,500,000.00 Escaped Assessment, $5,550,000.00 Penalty, $23,310,000.00 In-Lieu
Interest
Action:
Mr. Leonard moved to abate the penalty, otherwise adopt the escaped
assessments and interest as recommended by staff. The motion was seconded by Mr. Parrish but
failed to carry, Mr. Parrish and Mr. Leonard voting yes, Ms. Migden, Mr. Chiang and Mr. Westly
voting no.
466
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Upon motion of Ms. Migden, seconded by Mr. Chiang and duly carried,
Ms. Migden, Mr. Chiang and Mr. Westly voting yes, Mr. Leonard voting no, Mr. Parrish
abstaining, the Board adopted the escaped/excessive assessments, penalty and interest as
recommended by staff.
Sprint Spectrum L.P. (2722)
2002, ($9,448,700.00) Excessive Assessment
2001, $16,200,000.00 Escaped Assessment, $1,620,000.00 Penalty, $3,888,000.00 In-Lieu
Interest
2000, $40,000,000.00 Escaped Assessment, $4,000,000.00 Penalty, $13,200,000.00 In-Lieu
Interest
1999, $15,100,000.00 Escaped Assessment, $1,510,000.00 Penalty, $6,342,000.00 In-Lieu
Interest
Action:
Mr. Leonard moved to abated the penalty but otherwise adopt the escaped
assessments and interest as recommended by staff. Mr. Leonard withdrew his motion.
Upon motion of Mr. Parrish, seconded by Mr. Leonard and unanimously,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Mr. Westly, the Board adopted the
escaped/excessive assessments, penalty and interest as recommended by staff.
FINAL ACTION ON PETITIONS HEARD DECEMBER 4, 2003
Mr. Leonard moved to adopt staff recommendation in the petitions of AES
Alamitos, LLC (1100), 222549; AES Redondo Beach, LLC (1101), 222550; AES
Huntington Beach, LLC (1102), 222551; and, AES Placerita, Inc. (1146), 224763. The
motion was second by Mr. Westly but no vote was taken.
Mr. Parrish moved to adopt a unitary value of $387,200,000.00 in AES
Alamitos, LLC (1100), 222549. The motion failed for lack of a second.
Upon motion of Mr. Leonard, seconded by Mr. Westly and duly carried
Ms. Migden, Mr. Leonard and Mr. Westly voting yes, Mr. Parrish and Mr. Chiang voting no, the
Board ordered to reduce the unitary value of AES Alamitos, LLC (1100), 222549 to
$299,800,000.00 as recommended by staff.
Mr. Leonard moved to adopt staff recommendation in the petition of AES
Redondo Beach, LLC (1101), 222550. Mr. Parrish made a substitute motion to adopt a
unitary value of $268,371,742.00. The motion failed for lack of a second.
Upon motion of Mr. Leonard, seconded by Mr. Westly and duly carried
Ms. Migden, Mr. Leonard and Mr. Westly voting yes, Mr. Parrish and Mr. Chiang voting no, the
Board ordered to reduce the unitary value to $184,600,000.00 as recommended by staff.
Mr. Leonard moved to adopt staff recommendation in the petition of AES
Huntington Beach, LLC (1102), 222551. The motion was seconded by Mr. Westly.
Mr. Parrish made a substitute motion to adopt a unitary value of $206,207,000.00. The motion
failed for lack of a second.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
467
Thursday, December 4, 2003
Upon motion of Mr. Leonard, seconded by Mr. Westly and duly carried
Ms. Migden, Mr. Leonard and Mr. Westly voting yes, Mr. Parrish and Mr. Chiang voting no, the
Board ordered to reduce the unitary value to $93,300,000.00 as recommended by staff.
Mr. Leonard moved to adopt staff recommendation in the petition of AES
Placerita, Inc. (1146), 224763. The motion was seconded by Mr. Westly. Mr. Parrish made a
substitute motion to adopt a unitary value of $381,800,000.00. The motion failed for lack of a
second.
Upon motion of Mr. Leonard, seconded by Mr. Westly and duly carried
Ms. Migden, Mr. Leonard and Mr. Westly voting yes, Mr. Parrish and Mr. Chiang voting no, the
Board ordered to reduce the unitary value to $12,800,000.00 as recommended by staff.
ADMINISTRATIVE SESSION
PRESENTATION OF THE 2004-05 BASELINE BUDGET
Timothy W. Boyer, Interim Executive Director, made introductory remarks
regarding the proposed 2004-05 baseline budget, which will be developed for submittal to the
Department of Finance (Exhibit 12.6).
Action:
Upon motion of Mr. Chiang, seconded by Mr. Leonard and unanimously,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang, Mr. Westly absent, the Board approved
the 2004-05 baseline budget as recommended by staff.
BOARD MEMBER TO OVERSEE SALES TAX STREAMLINE PROJECT
Timothy W. Boyer, Interim Executive Director, made introductory remarks
regarding the implementation of Senate Bill 157, Streamlined Sales Tax Project. Mr. Boyer
recommended that the Board designate one of its Members to serve as the representative for the
Board of Equalization on the Board of Governance pursuant to provisions of SB 157
(Exhibit 12.7).
Action:
Upon motion of Mr. Chiang, seconded by Ms. Migden and unanimously,
Ms. Migden, Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Mr. Westly absent, the Board
designated the Chairwoman, Ms. Migden, to serve as the representative for the Board of
Equalization on the Board of Governance.
Ms. Mandel entered the Boardroom on behalf of Mr. Westly in accordance with
Government Code section 7.9.
APPROVAL OF CONTRACTS OVER $1 MILLION
Dade Powers, Chief, Administrative Support Division, made introductory
remarks regarding the approval of an inter-agency agreement to reimburse the Franchise Tax
Board for costs related to the collection of use tax through the Personal Income Tax Program, as
required by the enactment of SB 1009 (Exhibit 12.8).
468
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
Action:
Upon motion of Mr. Parrish, seconded by Ms. Migden and duly carried,
Ms. Migden, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Leonard voting no, the
Board approved the contract with the Franchise Tax Board.
APPROVAL OF BOARD MEETING CALENDAR APRIL – JULY 2004
Deborah Pellegrini, Chief, Board Proceeding Division, made introductory
remarks regarding the adoption of the Board meeting calendar for April through July 2004
(Exhibit 12.9).
Action:
Upon motion of Mr. Chiang, seconded by Ms. Migden and unanimously,
Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board
adopted the Board meeting calendar for April through July 2004.
ADMINISTRATIVE MATTERS, CONSENT
With respect to the Administrative Matters, Consent Agenda, upon a single
motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Ms. Migden,
Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, the Board made the following
orders:
Action:
Adopt the following resolutions extending its best wishes on their respective
retirements and its appreciation for their service to the State Board of Equalization and the State
of California (Exhibit 12.10).
Jean A. Coughlin, Business Taxes Compliance Specialist, Excise Taxes and Fees
Division, Headquarters
Patricia Jones, Senior Tax Representative, Stockton Branch Office
Jacqueline Kay Bloom, Tax technician II, Return Analysis Section, Headquarters
Action:
Approve the Board Meeting Minutes of September 24, 2003
Action:
Approve the withdrawal of Assessors’ Handbook Section 222, Standard Form
List (Exhibit 12.11).
ANNOUNCEMENT OF CLOSED SESSION
The Board recessed at 12:05 p.m. and reconvened immediately in closed session
with Ms. Migden, Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel present.
CLOSED SESSION
The Board met to discuss pending litigation (Govt. Code § 11126 (e) and
personnel matters (Govt. Code § 11126 (a)).
The Board recessed at 12:20 p.m. and reconvened immediately in open session
with Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel present.
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
469
Thursday, December 4, 2003
PROPERTY TAX MATTERS, ADJUDICATORY
Petitions for Reassessment of Unitary Value
Verizon California, Inc. (201), 224740
2003, $3,562,900,000.00 Value
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Mr. Leonard, seconded by Mr. Chiang and unanimously carried,
Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Ms. Mandel not participating in accordance
with Government Code section 7.9, Ms. Migden absent, the Board approved the reduced unitary
value of $3,501,200,000.00 as recommended by staff.
ADMINISTRATIVE SESSION
BOARD COMMITTEE REPORTS
Customer Services and Administrative Efficiency Committee
Upon motion of Mr. Leonard, seconded by Mr. Parrish and unanimously carried,
Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, Ms. Migden absent, the Board
approved the Customer Services and Administrative Efficiency Committee report (Exhibit 12.12).
LEGAL APPEALS MATTERS, ADJUDICATORY
Bobby R. and Mary H. Boydstun, 37252, 37254
4-1-96 to 9-30-97, $20,212.99 Tax, $2,027.95 Finality Penalty
10-1-94 to 3-31-96, $25,292.84 Tax, $5,071.42 Finality Penalty
Considered by the Board: October 15, 2003
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Mr. Leonard moved to deny the petition for rehearing. Ms. Mandel made a
substitute motion to grant the petition. The substitute motion was seconded by Mr. Parrish but
failed to carry, Mr. Parrish and Ms. Mandel voting yes, Mr. Leonard and Mr. Chiang voting no,
Ms. Migden absent.
Upon motion of Mr. Leonard, seconded by Mr. Parrish and duly carried,
Mr. Parrish, Mr. Leonard and Mr. Chiang voting yes, Ms. Mandel voting no, Ms. Migden absent,
the Board ordered to deny the petition for rehearing.
Porterville Ready Mix, Inc., 145627
1-1-98 to 12-31-00, $00.00 Tax
Considered by the Board: September 10, 2003
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Mr. Leonard, seconded by Ms. Mandel and unanimously carried,
Mr. Parrish, Mr. Leonard, Mr. Chiang and Ms. Mandel voting yes, Ms. Migden absent, the Board
ordered that the tax be redetermined to zero as recommended by the Appeals Division.
470
2003 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, December 4, 2003
The Board adjourned at 12:25 p.m.
The foregoing minutes are adopted by the Board on February 18, 2004.
Note: The following case was removed from the calendar prior to the meeting: Cricket
Communications, Inc. (2762), 224760.
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