Public Meeting Minutes
FRANCHISE TAX BOARD
July 6, 1999
The Franchise Tax Board met in open session at 9:30 a.m. at the State Board of Equalization, 450 N Street, Hearing Room 121, Sacramento, California. Present were Hon. Kathleen Connell, Hon. Johan Klehs, Hon. B. Timothy Gage.
Gerald Goldberg, Brian Toman, Johnnie Lou Rosas, Alan Hunter, Mike Brownell, Titus Toyama, Benjamin Miller, and Katie Horn.
Item 1. - Approval of Board Minutes
The Minutes of the March 23, 1999, Franchise Tax Board meeting were unanimously approved.
Item 2. Legislative Matters
- LP 99-50:
The Board agreed to support LP 99-50 (relating to Wertin v. Franchise Tax Board),
provided the staff works with interested parties to reach agreement on language.
- Bill positions were approved on a 2-0 vote (Member Gage abstained), as follows:
|Legislative Bill||Board Position||Legislative Bill||Board Position|
|AB 83 (Cardenas)|
AB 110 (Baugh)
AB 196 (Kuehl)
AB 370 (Wright)
AB 385 (Knox)
AB 414 (Havice)
AB 1208 (AR&T)
AB 1220 (Romero)
AB 1234 (Shelley)
AB 1370 (Wesson)
AB 1379 (Granlund)
AB 1697 (A Aging)
SB 240 (Speier)
SB 284 (Kelley)
SB 542 (Burton)
SB 680 (O'Connell)
SB 1272 (Ortiz)
|AB 601 (Cedillo)
AB 780 (Calderon)
AB 1016 (Briggs)
AB 1044 (Wright)
AB 1080 (Villaraigosa)
AB 1099 (Shelley)
AB 1392 (Hertzberg)
AB 1463 (Cedillo)
AB 1467 (Scott)
AB 1613 (Havice)
AB 1671 (A Judiciary)
SB 887 (Ortiz)
SB 934 (Burton)
SB 1016 (Bowen)
SB 1125 (Polanco)
SB 1230 (Burton)
Item 3. Regulation Matters
- Regulations 25128, 25128-1 and 25128-2 (Sales Factor); Proposed Regulations
25106.5, -2, -3, -4, -9, and -10 (Combined Report Mechanics); Proposed Regulations
19041 and 19044 (Protests); Discussion Draft Regulation 25106.5-1 (Combined Report
Mechanics Intercompany Transactions); Discussion Draft Regulation 25137(b)
(Property Factor Nonjurisdictional); and Discussion Draft Regulation 25137(c)
(Sales Factor Occasional Sale of Intangible Assets). The Board unanimously
approved the staff's status reports.
- Proposed Regulations 17252.5-1,
17265-1, 17266-1, 17267.2-1, 24356.2-1, 24356.3-1, 24356.4-1, 24356.7-1 (Recapture
of Deduction for Qualified Property Previously Used). The Board unanimously approved
the staff recommendation to proceed with formal noticing as proposed regulations.
- Proposed Regulation 17951-4 (Income Sourcing).
The Board unanimously approved the staff's recommendation to place the regulation on FTB's website, and announce a possible symposium date. If no requests for a symposium are received, staff is to forward the proposal to OAL for noticing as a proposed regulation.
- Proposed Regulation 25106.5 (Mechanics of Combined Reporting) is
currently pending before the Office of Administrative Law. The Board approved
additional staff amendments to that proposed regulation (providing the basic rules
of apportionment, including the prospective adoption of the Appeal of Joyce method
of apportionment). However, proposed subsection (e)(3), dealing with tax credits,
was deleted (2-1, Chair Connell no). Staff is authorized to proceed directly
to notice and hearing after the OAL review period for the original regulation
is complete. A staff amendment to pending Regulation 25106.5-2 (Capital Gains
in a Combined Report), adding new subsection (g) (dealing with capital loss carryforward),
was approved. Staff is authorized to proceed directly to the notice and hearing
for 25106.5-2(g) at the same time as amendments to the main regulation (Reg. 25106.5),
after OAL consideration of the pending original is completed.
Regulation 23334 (Tax Clearance Certificate).
The Board unanimously authorized staff to proceed with formal noticing as a proposed regulation.
Item 4. Administrative Matters
- Status of FY 1999/00 Budget:
- FY 2000/01 Budget Development:
- Facility Action Requests (Form 9):
Staff summarized the approved FTB 1999/00 Budget.
The Board unanimously approved the staff request to proceed with conceptual development of budget change proposals (BCPs). Final BCPs will be presented to the Board for approval prior to being submitted to Agency and the Department of Finance.
The Board unanimously approved the four proposed Form 9 requests: Telephone Room, Reproduction Services, Printer Room, and Office Alterations.
The Board unanimously approved the Annual Network Wiring Contract.
Item 5. Consideration of State Office Building Adjacent to FTB Headquarters
The Board unanimously authorized the staff to move ahead with the Department of General Services to lease 58% of the Phase III building.
Item 6. Executive Officer's Time
Brian Toman, Chief Counsel, reported on the audit of the department's Administrative Settlement Program conducted by the Bureau of State Audits. Member Gage and Chair Connell complimented the staff on the results of the report.
Item 7. Board Member's Time
The Board unanimously approved all Employee Recognition Resolutions. (Melody Aasletten, Clark Allen, Vadonna Carlson, William Caul, Eileen Cartwright, Mark Cole, Sheryl Ellis, Kent H. Evans, Frank Franco, Kathy Gipson, Janet Hammond, Barbara Hanson, Betty Kellogg, Emilio Martinez, Karl Munz, Lyle Nicholas, Irma Oliver, Douglas Patrick, Kerry Schultz, Cheryl Shaw, Kay Smith, Ina Tuck, Joan Weber, Josephine Willey, Meredith Wyatt.)
Item 8. Closed Session Announcement
Chair Connell announced the agenda for the Closed Session, pursuant to Government Code 11126.3.
The meeting was adjourned at approximately 10:38 a.m.