EXPLANATION OF DRAFT LANGUAGESection 25137

1.  CCR Section 25137(d) was amended to provide clarity and streamline the terms.

(d) In cases deemed appropriate by the Franchise Tax Board, it may elect to hear and decide petitions filed pursuant to Section 25137 instead of having this function performed by FTB staff or may elect to hear and decide a taxpayer's objection appeals of denied petitions for a to a variance action determination to FTB staff impositions of alternative apportionment methodologies pursuant to Section 25137.  As a condition to having such petition considered by the Board, the petitioning taxpayer shall waive in writing the confidentiality provisions of Section 19542 with respect to such petition and to any other facts which may be deemed relevant in making a determination.  Consideration of said petitions shall be in open session at regulatory-scheduled meeting.

This language was modified to make the subject matter clearer and to streamline the subject matter by using defined terms.

2.  CCR Section 25137(d)(1) was amended to clarify four (4) definitions and delete two (2) definitions.

(1) Definitions

(A) "Board member staff" means staff employed any of the three members of the Franchise Tax Board.

This definition was modified and moved below to (D) under "Franchise Tax Board member staff."

(B) (A) “Brief” means a written document containing an argument or arguments supporting a party’s position. A brief may, but is not required to, include citations to specific laws, regulations, or other authorities. A brief may be in the form of a letter, other informal writing, or formal legal writing. Briefs are subject to the requirements identified in these regulations.

Unnecessary language to the definition was deleted.

(C) (B) "Ex-parte communication" means any communication concerning a pending or impending petition to or from the Franchise Tax Board, itself, or Franchise Tax Board member staff, outside the presence of either FTB staff or the petitioner, without notice to all parties. between one of the three-members of the Franchise Tax Board and/or Board member staff, and the petitioner and/or his or her representative, or FTB staff.

Additional language clarifies that communication about a pending or impending petition without notice to all parties is an ex-parte communication.  The reference to "Franchise Tax Board, itself," is a reference to the Three-member board.  California Revenue and Taxation Code section 19442 refers to the three member board as the "Franchise Tax Board, itself."  To be consistent, that term has been adopted throughout the proposed amendments to the regulation here.

(D) (C) "Franchise Tax Board member staff" means staff employed by any of the three members of the Franchise Tax Board.

This was moved from (A) above to (C) to place the defined term, "Franchise Tax Board member staff," in appropriate alphabetical order within the definitions section.

(E) (D) "FTB staff" means staff employed by the Franchise Tax Board and does not include any Franchise Tax Board member staff.

Additional language clarifies specifically who is not FTB staff. 

(E) "Open session at a regularly-scheduled meeting" means the open session of a the Franchise Tax Board regularly-scheduled meeting of the Franchise Tax Board.

Language was moved from one place to another for the sake of an easier read.

(F) "Three-member board" means California Franchise Tax Board as defined by California Government Code section 15700.

The term is defined by statute, at California Government Code section 15700, and therefore is not required to be defined here.

(G) To "make a record" means to memorialize in writing the identity of who initiated the inadvertent ex-parte communication, and all parties to the appeal who were entitled to participate.  The record made must reflect the general substance of what was discussed and the response of any Franchise Tax Board member and/or the Board member's staff.  If any documents are provided or exchanged, they must be identified, copied and made part of the record.

This definition was eliminated because "making a record" should be detailed in the body of the amendments to the regulation itself. Please see CCR Sections 25137(d)(3)(C)1 and 25137(d)(3)(C)2.

(H) (F) "Variance action" means a taxpayer filed petition for an alternative apportionment methodology pursuant to Section 25137before FTB staff, or a FTB staff imposition of an imposed alternative apportionment methodology pursuant to Section 25137, to which the taxpayer objects.

Language was modified to make the definition clearer and more streamlined.

3.  CCR Section 25137(d)(2) was modified to address the two types of petitions that can be made to the Franchise Tax Board under CCR Section 25137(d).

(2) In the event a variance action has been filed with FTB staff by a taxpayer, Petitions.  If the taxpayer desires to petition the Franchise Tax Board, itself, to hear and decide its petition filed pursuant to Section 25137, or of an adverse variance action determination, the following procedures shall apply:

This subsection was streamlined to cover petitions brought under CCR Section 25137(d): either a petition to the Franchise Tax Board, itself, for an alternative apportionment methodology; or a petition to the Franchise Tax Board, itself, from an adverse variance action determination. The original text, now deleted, exclusively addressed variance actions filed with staff.

4.  CCR Section 25137(d)(2)(A) was modified to address the procedures and deadlines for filing a petition with the Franchise Tax Board. Since the existing language of CCR Section 25137(d) uses the term "petition" as both an initial request for an alternative apportionment methodology with the Franchise Tax Board, itself, and a request of the Franchise Tax Board, itself, to hear a taxpayer's petition of an adverse variance action determination by FTB staff, the regulation does not require two different sets of procedures for each type of petition.

(A) The taxpayer shall file its petition with the Chief Counsel of the Franchise Tax Board explaining why its requested alternative apportionment methodology pursuant to Section 25137 is warranted, or why FTB's staff's imposed alternative apportionment methodology is not warranted. Such petition shall be filed no later than either: and/or its representative, may present facts and assertions pertaining to the variance action in person to FTB staff who will hear and decide the variance action.

1. Sixty (60) calendar days after a written adverse action determination by FTB staff to impose an alternative apportionment methodology pursuant to Section 25137;

2. One hundred twenty (120) calendar days from filing a claim for refund pursuant to Section 19301; or

3. Sixty (60) calendar days prior to a scheduled protest hearing pursuant to Section 19044.

This subsection was altered to address the process for any petition filed with the Franchise Tax Board, itself. This language streamlines the process. The new language also identifies to whom the petition should be sent and deadlines for filing the petition. Originally, this subsection exclusively addressed variance actions filed before staff, and no deadlines were set forth. That language has been deleted.

5.  CCR Section 25137(d)(2)(B) was amended to further conform with the restructuring and streamlining of the amendments to this regulation. This subsection deals specifically with the waiver of confidentiality.

(B) At the time the taxpayer's petition is filed, the taxpayer shall submit a waiver to the Chief Counsel of the Franchise Tax board, waiving the confidentiality provisions of Section 19542 with respect to the taxpayer's petition.

If a variance action initiated by the taxpayer pursuant to Section 25137 is not granted by FTB staff, either in whole or in part, or if the variance action was imposed by staff requiring employment of an alternative apportionment methodology in a manner to which the taxpayer objects, the taxpayer may appeal the variance action to the Board, itself.

This subsection addresses the waiver of confidentiality in connection with the taxpayer's petition.  Originally, this subsection exclusively addressed that a taxpayer could appeal an adverse variance action determination to the Franchise Tax Board, itself.  As stated above, these procedures have been restructured and streamlined. As a result, the former language has been deleted.

6.  CCR Section 25137(d)(2)(C) was added to explain the notification procedures for a petition to the Franchise Tax Board.

(C) Upon submittal of the taxpayer's petition and waiver of confidentiality, the Executive Officer of the Franchise Tax Board, or the Executive Officer's designee, shall notify the Franchise Tax Board, itself, of the taxpayer's petition.

This subsection provides that the Executive Officer of the Franchise Tax Board or a designee, shall notify the Franchise Tax Board, itself, of the petition.

7.  CCR Section 25137(d)(2)(D) was modified to explain that where the petition to the Franchise Tax Board, itself, has not previously been determined by FTB staff, the Chief Counsel of the Franchise Tax Board shall ensure the petition is reviewed by FTB staff.

(D) If FTB staff have not previously made a determination on the taxpayer's petition before the Franchise Tax Board imposition or request for an alternate apportionment methodology, the Chief Counsel of the Franchise Tax Board shall ensure FTB staff considers the imposition or request and makes a determination on whether the alternative apportionment methodology is warranted.

This subsection provides that the Chief Counsel will ensure that FTB staff considers the petition if it has not previously done so. Language that was deleted is defined under "variance action," making the deleted language redundant.

8.  CCR Section 25137(d)(2)(E) and previously proposed CCR Section 25137(d)(3) were modified and consolidated to now provide both that the Chief Counsel of the Franchise Tax Board will acknowledge the taxpayer's petition, which initiates the briefing schedule for the parties, and to identify when the ex-parte rules apply. Language in previously proposed CCR Section 25137(d)(3) was deleted, and with new modifications now explains the procedure for what was formerly referred to as an "appeal," and which is now referred to as a "petition."

(E) When FTB staff have made a determination on whether the alternative apportionment formula methodology is warranted, the Chief Counsel of the Franchise Tax Board shall acknowledge taxpayer's petition and set a briefing schedule pursuant to this subsection. Ex-parte communication rules apply beginning when the Chief Counsel acknowledges taxpayer's petition and continues while the petition is pending with the Franchise Tax Board, itself, and releases when the Franchise Tax Board, itself, renders a decision. Taxpayer shall submit a brief within sixty (60) days of the Chief Counsel's acknowledgement.

(3) In the event the taxpayer desires to appeal a variance action to the Three-member board, the following procedures shall apply:

(A) The taxpayer must waive, in writing, the confidentiality provisions of Section 19542 with respect to such variance action, which waiver must be sent to the Franchise Tax Board Chief Counsel,

(B) To file an appeal under this regulation, the taxpayer must submit a brief, as provided for within this section, within sixty (60) calendar days of being notified in writing by FTB staff that a variance action initiated by the taxpayer filing a petition pursuant to Section 25137 was denied, in whole or in part, by FTB staff, or a variance action was imposed by FTB staff requiring employment of an alternative apportionment methodology.After the taxpayer has submitted its opening brief, FTB staff has shall have thirty (30) days to submit its opening brief.  Thereafter, the taxpayer has shall have thirty (30) days to submit a reply brief.  Further briefing may be required by the Franchise Tax Board, itself.  All briefs are subject to the following rules requirements:

1.   Opening Bbriefs are limited to double-spaced thirty (30) pages and 12 point font per inch of paper. 

2.   Reply briefs are limited to double-spaced fifteen (15) pages and 12 font per inch of paper.

3.   All briefing must be filed by the parties with the Chief Counsel of the Franchise Tax Board Chief Counsel.

This subsection provides for acknowledgement of the petition, when the ex-parte communication rules apply, and the briefing schedule.  The regulations of the California Office of Tax Appeal and other sources were consulted for the briefing schedule and the page limitations and font size. There are some minor changes to the wording of this subsection.

9.  Previously proposed CCR Section 25137(d)(3)(C) has been deleted due to the restructuring of the amendments to this regulation.

(C) Upon submittal of the taxpayer's opening appeal brief and the written waiver of the confidentiality provisions of Section 19542 with respect to such variance action and to any other facts that may be deemed relevant by the three-member board in making a decision on the variance action, the Franchise Tax Board's Executive Officer, or the Executive Officer's designee, shall notify the Three-member board of the taxpayer's request to have the Three-member board hear and decide the appeal of the variance action. 

These deleted provisions have been modified and appear above in CCR Sections 25137(d)(2)(B) and(C).

10.  Previously proposed CCR Section 25137(d)(3)(D) was modified and relocated to CCR Section 25137(d)(2)(F) to address the extension of the statute of limitations for Revenue and Taxation Subsection 19057(a).

(D)(F) If a notice of proposed deficiency assessment, within the meaning of Section 19057(a), has not been mailed to the taxpayer with respect to the tax year pertaining to the petition variance action, the taxpayer must shall agree in writing if requested by the Franchise Tax Board to an extension of the statute of limitations for the mailing of the notice of proposed deficiency assessment, until 180 days after the Franchise Tax Board, itself, appeal of the variance action has made its determination during an open session at a regularly-scheduled meeting. been heard and decided by the Franchise Tax Board.

The word "petition" has been substituted with "variance action" for clarity.  This is because a "petition" is considered by the Franchise Tax Board, itself, while a "variance action" is considered by FTB staff.  Language was modified to clarify that the taxpayer's statute of limitations waiver expires 180 days after the Franchise Tax Board, itself, has made its determination.

11.  Previously proposed CCR Section 25137(d)(3)(E) was modified and relocated to CCR Section 25137(d)(2)(G) and establishes how a hearing date is set and noticed.

(E)(G) Upon completion of briefing, a hearing shall be scheduled during an open session at a regularly-scheduled meeting to consider taxpayer's petition.  The taxpayer will shall be notified in writing by FTB staff the Franchise Tax Board of the hearing date.  notification by the Executive Officer or the Executive Officer’s designee, as provided above in subsection (3)(C), the Franchise Tax Board shall set a hearing in an open session at a Three-member board meeting to hear and decide the taxpayer's appeal of the variance action  The taxpayer will be notified in writing by the Franchise Tax Board of the hearing date. 

This modification more succinctly states how a hearing date is set and noticed.

12. Previously proposed CCR Section 25137(d)(3)(F) was modified and relocated to CCR Section 25137(d)(2)(H), and addresses the rules for the parties' presentations at the hearing. Modifications to prior language are consistent with the remainder of the amendments to this regulation.

(F)(H) The Franchise Tax Board, shall give tThe parties shall have thirty (30) minutes to present their respective positions and an additional fifteen (15) minutes for the taxpayer's reply. The Franchise Tax Board, itself, Three-member board has the discretion to allow additional time as warranted. Presentations of the parties at the hearing shall occur as follows:

1. The taxpayer shall first make its opening presentation.

2. FTB staff shall make its opening presentation immediately following the taxpayer's opening presentation.

3. The taxpayer shall make its reply presentation immediately following FTB staff's opening presentation.

The modifications to the language are consistent with the remainder of the regulation.  The term, "The Franchise Tax Board, itself," is used instead of "Three member board."

13.  Previously proposed CCR Section 25137(d)(3)(G) was modified and relocated to CCR Section 25137(d)(2)(I), and addresses witnesses rules.  Minor changes were made to clarify the provision.

(G)(I)  Witnesses.  A party seeking wishing to have an expert or percipient witness or witnesses testify before the Franchise Tax Board, itself, must notify the Franchise Tax Board and the other party to the proceeding no later than fifteen (15) calendar days after the filing of the taxpayer's reply brief prior to the hearing date, of the identity of the witnesses or witnesses, the general nature of the expected testimony, and the expected duration of the testimony at the hearing.

These modifications clarify the rules governing witnesses within this subsection. Terms are consistently stated with the remainder of the regulation. "Calendar" is added to "days" to clarify the method of counting days when the identity of witnesses must be revealed. 

14.  Previously proposed CCR Section 25137(d)(3)(H) was modified and relocated to CCR Section 25137(d)(2)(J), and addresses when the decision of the Franchise Tax Board, itself, will be made regarding a taxpayer's petition.  The revisions utilize language used throughout the proposed regulation.

(H)(J) The Three-member board Franchise Tax Board, itself, shall render its decision on the taxpayer's petition variance action during an open session of a regularly-scheduled meeting. when the Three-member board has reached its decision.

The modifications clarify the rules governing decisions identified in this subsection and are consistent with the language used throughout the proposed regulation. 

15.  Previously proposed CCR Section 25137(d)(4) was modified and relocated to CCR Section 25137(d)(3), and provides the prohibition of ex-parte communication.

(4 3) Applicability of Ex-parte Communication. Rules Except as provided by this regulation, there shall be no ex-parte communication regarding any substantive issue in the petition without notice and opportunity for all parties to participate in the communication.

This subsection sets forth the prohibition of ex-parte communication.

16.  Previously proposed CCR Section 25137(d)(4)(A) was modified and relocated to CCR Section 25137(d)(3)(A), and states that ex-parte communication rules are not applicable during a variance action before FTB staff.

(A) The Eex-parte communication rules do not apply during the pendency of a petition variance action that is before FTB staff. before FTB staff or the Three-member board.

The modifications clarify the applicability of the ex-party rules as provided in this subsection.

17.  Previously proposed CCR Section 25137(d)(4)(B) was modified and relocated to CCR Subsection 25137(d)(3)(B), and clarifies the timeline for the applicability of ex-parte communication rules.  Language was deleted for purposes of restructuring and clarifying the revisions to this regulation.

(B) The Eex-parte communication rules apply beginning with the acknowledgement of the taxpayer's petition continuing until a final decision has been rendered, as is set forth in subdivision (2)(E) above. The Executive Officer or its designee shall notify the Franchise Tax Board, itself, of the applicability of the ex-parte communication rules to the petition. during the pendency of any appeal to the Franchise Tax Board of a variance action as follows: There shall be no communication, direct or indirect, regarding any substantive issue relating to the appeal between any Franchise Tax Board member or Board member staff, appellant or appellant's employee or representative, and/or FTB staff, without notice and opportunity for all parties to participate in the communication.

This language clarifies the timeline for the applicability of the ex-parte communication rules.  For purposes of restructuring the amendments to this regulation, language that is addressed in CCR section 25137(d)(3) has been deleted here.

18.  Previously proposed CCR Section 25137(d)(4)(C) was modified and relocated to CCR Section 25137(d)(3)(C), and explains when ex-parte communication rules do not apply.  Deleted language was modified and relocated to proposed CCR section 25137(d)(2)(E), as noted above.

(C) The ex-parte communication rules do not apply to communications between the members of the Franchise Tax Board, FTB staff, and the taxpayer or its representatives during the pendency of a petition if the communication only relates to the scheduling of a future discussion of the petition, in which case: Applicability of the ex-parte communication rules ends when the Franchise Tax Board renders its decision on the appeal of a variance action.

This language provides for the exception where communications do not violate the ex-parte communication rules.  The deleted language has been modified and relocated to CCR Section 25137(d)(2)(E) above.

19.  Previously proposed CCR Section 25137(d)(4)(D) was modified and relocated, in part, to CCR Section 25137(d)(3).  This section discusses permitted communications and ex-parte communications.  Some of the language has been deleted.

(D) Permitted communications between the Franchise Tax Board, FTB staff, and the taxpayer and/or its employees and/or representatives during the pendency of an appeal of a variance action include:

1. Briefs and oral presentations at open session are not ex-parte communications, and are permitted communications.

2. Ex-parte communications are permitted provided that the communication does not pertain to any matters within the variance action, but instead involves communication between the taxpayer, the representative, the board member or Board member staff, and FTB staff that only relates to the scheduling of a future discussion about the substantive matters of the variance action.  If this is the goal of such an ex-parte communication, then:

This section has been deleted and substituted by the new language in (D) below. Portions of this language in subsections 1 and 2 have been modified and relocated to (d)(3)(C), as discussed above in #18.

20.  Previously proposed CCR Section 25137(d)(4)(D)2.a. was modified and relocated to CCR Section 25137(d)(3)(C)1, and addresses a permitted ex-parte communication for a future substantive discussion.

1. The Franchise Tax Board member and/or Franchise Tax Board member staff shall invite all parties and/or their representatives to participate in a scheduled telephonic discussion or in-person meeting as soon as practicable. Any communication for purposes of arranging setting up this scheduled future discussion or in-person meeting shall only concern the scheduling and not the substance of the petition subject variance request.  All parties and/or their representatives and the Franchise Tax Board member and/or the Franchise Tax Board member staff shall coordinate work together and to make a reasonable effort to arrange find a mutually-agreeable date, time, and place to hold the telephonic discussion or in-person meeting. If the parties cannot agree on a date, time, and place to hold the telephonic discussion or in-person meeting, then the meeting it shall not occur be held. 

Revisions were made to this subsection for clarity.

21.  Previously proposed CCR Section 25137(d)(4)(D)2.b. was modified and relocated to CCR Section 25137(d)(3)(C)2, and addresses ex-parte procedures for when a party chooses not to participate in the telephonic discussion or in-person meeting.  It also addresses documenting the telephonic discussion or the in-person meeting, which is provided to all parties.

2. If the telephonic discussion or in-person meeting has been scheduled and one of the parties does not participate or attend, then the telephonic discussion or in-person meeting may proceed and will not be considered an ex-parte communication. All parties must be given the opportunity to participate in a telephonic discussion or attend an in person meeting scheduled at a mutually agreeable place, date, and time.  Regardless of whether all parties actually participate in the telephonic discussion or attend the in-person meeting, the Franchise Tax Board member and/or the Franchise Tax Board member's staff participating in the telephonic discussion or attending the in-person meeting must:

i.a. Document in writing substantive matters discussed at the  telephonic discussion or in-person meeting.

ii.b Provide to all parties and their representatives to the petition, but not to other Franchise Tax Board members, on the day subsequent to the telephonic discussion or in-person meeting the documentation pertaining to the substantive matters addressed and copies of any materials distributed by any of the parties participating shared by the parties, the Franchise Tax Board member, and/or Board member staff participating in the telephonic discussion or attending the in-person meeting. to all parties to the appeal and their representatives within fifteen (15) days of the telephonic discussion or in person meeting If any party is does not participate in absent from the telephonic discussion or in person meeting, that party shall have within fifteen (15) days from the date of the telephonic discussion or attend in-person meeting the Franchise Tax Board member and/or the Board member staff must provide an opportunity for the absent party or parties to respond to the substantive matters discussed documentation and the any materials distributed. Such written response shall be provided to the opposing party. the Franchise Tax Board member and/or the Board member staff must provide an opportunity for the absent party or parties to respond to the documentation and any materials supplied for the telephonic discussion or in person meeting within fifteen (15) days of the telephonic discussion or in person meeting. The documentation of specific matters discussed must be in sufficient context and detail to allow the absent party or parties the opportunity to respond to any matters discussed at the telephonic discussion or in person meeting in writing and/or submit any other materials for consideration he or she may wish to provide to the Board member and/or Board member staff.  Any such writing or material must also be supplied at the same time to the opposing party or its representatives   within ten (10) days before the hearing.

A timeline for the participating parties to provide documentation from the discussion or meeting to non-participating parties is set forth. A deadline for the non-participating party to respond to that documentation was also provided. The remaining modifications provide clarity. 

22.  Previously proposed CCR Section 25137(d)(4)(E) was modified and relocated to CCR Section 25137(d)(3)(D), and explains how, in the event of an ex-parte communication, the Franchise Tax Board member or Franchise Tax Board member staff shall document the substance of the ex-parte communication and provide the documentation to other Franchise Tax Board members and all parties.

(E)(D)  When there has been In the event an ex-parte communication occurs, the Franchise Tax Board member and/or Franchise Tax Board member staff shall document in writing the substance of the ex-parte communication and shall provide it to the other Franchise Tax Board members and the parties to the petition during the open session of the regularly-scheduled meeting when the petition is considered by the Franchise Tax Board, itself. must make a record of the ex-parte communication and provide it to the Franchise Tax Board members present at the Franchise Tax Board's open meeting where the Franchise Tax Board will consider the appeal of the variance action. If any documents are provided or exchanged, copies must be provided to all parties and/or their representatives within fifteen (15) days of the telephonic discussion or in person meeting.

The modifications provide more details and thus provide clarity.      

23.  Previously proposed CCR Section 25137(d)(4)(F).was eliminated, and replaced with the proposed modifications to CCR Section 25137(d)(3)(D), as explained above.

(F) In the event a Franchise Tax Board member and/or or the Board member staff have an inadvertent ex-parte communication with any party to the appeal of a variance action, then the Franchise Tax Board member and/or or the Board member staff must make a record of that ex-parte communication.  If any documents are provided or exchanged, they must be identified, made part of the written record, and copies provided to all parties and/or their representatives at the Franchise Tax Board's open meeting where the Franchise Tax Board will hear and decide the appeal of the variance action. The preparation and distribution of such documents are subject to the requirements of Government Code section 11125.2(c).

This deletion has been replaced by CCR section 25137(d)(3)(D), explained immediately above.

24.  Previously proposed CCR Section 25137(d)(4)(G).addressed the Bagley-Keene Act. It has been deleted as unnecessary.

(G) Because the Bagley-Keene Act, set forth at California Government Code sections 11120 through 11132,  prohibits a Franchise Tax Board member from sharing any written or oral information received during an ex-parte communication, even if the communication is inadvertent, with any other Franchise Tax Board member except at a duly noticed open meeting of the Franchise Tax Board, the Franchise Tax Board member involved in an ex-parte communication must report that communication at the formal hearing, where the Franchise Tax Board will hear and decide the appeal of a variance action.  The Franchise Tax Board member must disclose the ex-parte communication on the record to the public, and other Franchise Tax Board members, and distribute the writing memorializing the communication as summarized above to the other Franchise Tax Board members, as well as make available all documents exchanged or provided during the ex-parte communication.  The preparation and distribution of the documents between the Franchise Tax Board members are subject to the provisions of Government Code section 11125.1(c).

This subsection was considered unnecessary and redundant.  The requirements of the Bagley-Keene Act already statutorily exists, as does Government Code section 11125.1(c).

25.  Previously proposed CCR Section 25137(d)(4)(H) was eliminated.  This subsection had explained that a summary of the ex-parte communication must be included in the minutes of the Franchise Tax Board's open meeting.

(H) The Franchise Tax Board staff must include a short summary of the ex-parte communication in the minutes of the Franchise Tax Board open meeting at which the ex-parte communication is disclosed.

Documentation of ex-parte communications is now covered under proposed CCR section 25137(d)(3)(D).

26.  CCR Section 25137(d) was modified to address the applicability of the amendments to this regulation.

(5)(4) Applicability date. The amendments to subsection (d) are applicable only as of the effective date of amendments to this subsection of the regulation.  revisions to this subsection prospectively apply to variance actions and appeals of variance actions filed on or after the effective date of these changes.

This language has been proposed to be revised to make it clear that the proposed amendments are applicable prospectively only. The applicability date has not yet been set.

Note: Authority cited: Section 19503, Revenue and Taxation Code.