Approved 2001 Minutes - Thursday April 19, 2001

The Board met at its offices at 450 N Street, Sacramento, at 9:30 a.m. with Vice Chairman Chiang and Mr. Andal present, Ms. Mandel present on behalf of Dr. Connell in accordance with Government Code Section 7.9.

ANNOUNCEMENT OF CLOSED SESSION

The Board recessed immediately in closed session with Mr. Chiang, Mr. Andal and Ms. Mandel present.

CLOSED SESSION

The Board met to discuss and Revenue and Taxation codes 7093.5, 30459.1 and 50156.11 settlements and personnel matters.

The Board recessed at 9:31 a.m. and reconvened at 9:40 a.m. in open session with Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel present.

RETURN PROCESSING AUTOMATION PROJECT CONTRACT

The Board deferred consideration of this matter.

FIELD OFFICE STAFFING MODELS AND SUPERVISORY RATIOS

The Board deferred consideration of this matter.

ADMINISTRATIVE MATTERS, CONSENT

With respect to the Administrative Matter, Consent Agenda, upon a single motion of Mr. Chiang, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs absent, the Board made the following orders:

Action: Adopt the following resolution extending its best wishes on their respective retirements and its appreciation for their service to the Board and the State of California (Exhibit 4.11).

Linda Grey, Executive Assistant, Technology Services Division, Headquarters

Adrianne M. Metzger, Business Taxes Compliance Supervisor I, Stockton Branch Office

Action: Approve the January 23-24, 2001 and the February 14-15, 2001, Board Meeting Minutes.

Action: Approve the Delegations of Board Authority to the Chief, Board Proceedings Division.

Delegation One

To submit franchise and income tax appeals for Board decision on the written record and to close appeal files upon withdrawal or resolution of appeals or failure to supplement appeals upon request. This authority was originally delegated to the Chief on November 19, 1992, with "after extended delays" in place of "upon request". Since the Board adopted the Rules of Practice, extended delays have ceased to be a problem, so we recommend that the language be changed as indicated.

Delegation Two

To specify deadlines in compliance with Board orders for post-hearing submissions from taxpayers, other state agencies and Board staff. To monitor those deadlines, to grant extensions of time upon approval of the Board Chair and to submit on the record cases in which any party fails to file submissions by the specified deadline. To specify the earliest possible date for Board consideration of these recommended decisions.

Delegation Three

To report contribution disclosures on the record of a Board meeting if a hearing is held, or into the written record of a Board meeting if no hearing is held. This delegation would specify the term "Board staff" in Contribution Regulation 7009(d).

Delegation Four

To postpone Board hearings. This delegation would specify the authority described in Regulation 5076(c). The next time the Rules of Practice are amended, we will suggest this specification as an amendment.

Exhibits to these Minutes are incorporated by reference.

LEGISLATIVE COMMITTEE REPORT

Margaret Shedd, Legislative Counsel, presented the Legislative Committee Report (Exhibit 4.12).

Speakers: Cliff Berg, California Association of Collectors

Ron Sargis, Counsel, California Association of Collectors

Robert Teegarden, California Catholic Conference

Upon motion of Mr. Chiang, seconded by Mr. Klehs and duly carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Ms. Mandel voting no, the Board approved support of Property/Business/Administration Tax Bill No. AB172.

Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board approved the support of Special Taxes 4-16.

Upon motion of Mr. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board approved the committee report.

CUSTOMER SERVICES AND ADMINISTRATIVE EFFICIENCY COMMITTEE REPORT

Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board approved the committee report (Exhibit 4.13).

BUSINESS TAXES COMMITTEE REPORT

Upon motion of Mr. Andal, seconded by Mr. Klehs and duly carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, and Mr. Andal voting yes, Ms. Mandel voting no, the Board approved the committee report (Exhibit 4.14).

PROPERTY TAX COMMITTEE REPORT

Upon motion of Ms. Mandel, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board approved the committee report (Exhibit 4.15).

LEGAL APPEALS MATTERS, ADJUDICATORY

Redriders, Inc., SR AA 14-693813; 29657

1-1-95 to 9-30-98, $2,230.47 Tax

Considered by the Board: Hearing Notice Sent – No Response

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

Charles L. & Evelyn M. Harmon, SR EH 23-833110; 33961

1-1-96 to 12-31-98, $11,881.84 Tax, $1,246.86 Penalty, Negligence

Considered by the Board: Hearing Notice Sent – No Response

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs voting no, the Board ordered that the negligence penalty be deleted and the remainder of the petition be submitted for decision to the next Sacramento Board Meeting.

Anytime, Inc., SR EA 97-035092; 52821

12-10-92 to 12-31-97, $216,247.72 Tax, $00.00 Penalty, Negligence

Considered by the Board: Hearing Notice Sent – No Response

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Mr. Klehs moved to redetermine the petition as recommended by the Appeals Section. The motion was seconded by Ms. Mandel, but no vote was taken.

Mr. Andal moved to grant the petition. The motion was seconded by Mr. Parrish but failed to carry, Mr. Andal voting yes, Mr. Parrish, Mr. Chiang, Mr. Klehs and Ms. Mandel voting no.

Upon the motion of Mr. Parrish, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered to reduce the measure of tax by 50%.

Norton S. Geller, SR AC 13-726965; 89000069820

4-1-94 to 3-31-97, $14,418.12 Tax

Considered by the Board: Case Heard But Not Decided

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

Bahram Javaherian, SR AC 13-822583-010; 89000083730

Fahrad Delrahim, aka Fahrad Arya; SR AC 53-000179-010; 89000969980

4-1-94 to 2-27-97, $39,678.29 Tax, $3,967.83 Penalty, Negligence

Considered by the Board: Case Heard But Not Decided

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

Les Alkana Motor Car Company, Inc., SR AP 17-678258; 89000199290, -250

4-1-93 to 9-30-96, $3,122.26, $00.00 Penalty, Negligence

Considered by the Board: Cases Heard But Not Decided

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

James Akers, SR GHC 26-725121; 89000656470

10-1-92 to 9-30-95, $11,986.50; $00.00 Penalty; Negligence

Considered by the Board: Case Heard But Not Decided

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

William Ross Galyon, SR KH 28-735025-010; 89000752730

4-1-95 to 12-31-97, $11,052.72 Tax

Considered by the Board: Cases Heard But Not Decided

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by Appeals Section.

FRANCHISE AND INCOME TAX MATTERS, ADJUDICATORY

890 Village Green, a California Limited Partnership, 58572

1995, $1,509.00 Claim for Refund

1996, $1,123.00 Claim for Refund

1997, $ 883.00 Claim for Refund

1998, $ 800.00 Claim for Refund

Submitted for Decision: April 13, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision modifying the action of the Franchise Tax Board.

Wesley S. & Kimberly L. Brown, 75801

1996, $343.00 Assessment

Submitted for Decision: October 27, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Don McComas Enterprises, Inc., 27814

1990, $134,109.00 Assessment

Submitted for Decision: October 18, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the modified action of the Franchise Tax Board.

Jianhua Hu, 56616

1998, $1,185.00 Assessment

Submitted for Decision: August 31, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Eric S. and Candace E. Hyman, 37244

1995, $717.73 Assessment

Submitted for Decision: November 28, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the modified action of the Franchise Tax Board

Hyundai Precision & Industry, 98A-0530, 89002463190, -200

1984, $ 91.00 Assessment, $ 23.00 Penalty

1985, $ 330.00 Assessment, $ 83.00 Penalty

1986, $ 3,501.00 Assessment, $175.00 Penalty

Hyundai Precision & Industry, 98A-0531, 89002463200

1984, $ 1,442.00 Assessment

1985, $11,384.00 Assessment

1986, $55,191.00 Assessment

Submitted for Decision: October 11, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining action of the Franchise Tax Board.

Roy W. & Pamela M. Kindelberger, 42953

1995, $2,156.00 Assessment

Submitted for Decision: July 28, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Ms. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the modified action of the Franchise Tax Board.

Wilbur Messinger and Betty Messinger (Deceased), 52423

1998, $148.32 Claim for Refund

Submitted for Decision: July 12, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Sanjay Narayan, 79538

1996, $1,054.00 Assessment

Submitted for Decision: December 18, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Carl B. Stone, 49601

1987, $1.00 or more Claim for Refund

Submitted for Decision: June 9, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Novacap, Inc., 99R-0172; 89002467070

1992, $1,244.15 Claim for Refund

Submitted for Decision: January 4, 2000

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board adopted a decision to deny the petition for rehearing.

Toys "R" Us, Inc., 49612

1991, $ 689,601.00 Claim for Refund

1992, $1,178,134.00 Claim for Refund

1993, $1,561,119.00 Claim for Refund

1994, $1,913,263.00 Claim for Refund

Submitted for Decision: February 16, 2001

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Klehs and Mr. Andal voting yes, Ms. Mandel abstaining and Mr. Chiang not participating, the Board adopted a decision to deny the petition for rehearing.

LEGAL APPEALS MATTERS, CONSENT

The Board deferred consideration of the following matters: Quantum Corporation, TU ET 35-101233; 89000904850, -860; 33893, and Cadence Design Systems, Inc., TU ET 35-101218; 89000904770, -780, -790, -800, -810, -820.

With respect to the Legal Appeals Matters, Consent Agenda, upon a single motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board made the following orders:

Jerair Panosian, SY BH 19-643184; 89000260670

7-1-91 to 6-30-94, $254,664.04 Tax, $81,408.20 Penalty, Fraud

Action: Redetermine as recommended by Appeals Section.

Mike Kazanjian, SR BH 19-782843; 89000294410

7-1-94 to 6-30-97, $8,678.85 Tax, $867.93 Penalty, Negligence

Action: Redetermine as recommended by Appeals Section.

Yosemite Falls Inc., SR DH 99-577429; 89002315130

4-1-95 to 12-31-97, $5,195.94 Tax, $519.61 Penalty, Negligence

Action: Redetermine as recommended by Appeals Section.

Quantum Corporation, TU ET 35-101233; 89000904850, -860; 33893

9-1-95 to 12-31-95, $386.72 Claim for Refund

12-1-95 to 12-31-95, $ 656.96 Claim for Refund

1-196 to 12-31-97, $3,196.47 Claim for Refund

Action: The Board took no action.

Cadence Design Systems, Inc., TU ET 35-101218;

89000904770, -780, -790, -800, -810, -820

9-1-95 to 3-31-96, $399.50

6-1-96 to 6-30-97, $356.86

12-1-97 to 9-30-98, $196.47

3-1-97 to 3-31-97, $80.71

9-1-97 to 9-30-97, $75.43

3-1-98 to 3-31-98, $102.74

Action: The Board took no action.

FCI Communications, SR GH 26-789412; 89000674230

4-1-94 to 3-31-97, $00.00 Tax, $00.00 Penalty

Action: Redetermine as recommended by Appeals Section.

Dos Coyote Corporation, SB UT 81-012173; 89001078440

2-28-95, $19,375.00 Tax

Action: Redetermine as recommended by Appeals Section.

Iron Horse Equipment Corporation, SR EA 23-796809; 89000415980,

89000416000, -010,

1-1-82 to 9-30-89, $00.00 Tax, $00.00 Penalty, Finality

1-1-90 to 12-31-92, $$00.00 Tax, $00.00 Penalty, Finality

Action: Redetermine as recommended by Appeals Section.

I Squared R Element Company, Inc., SC OH 97-235742; 89002078800

1-1-90 to 12-31-97, $00.00 Tax, $00.00 Penalty, Negligence

Action: Redetermine as recommended by Appeals Section.

The Flexaust Company, Inc., SR OHA 99-740745; 15048

5-1-95 to 12-31-97, $00.00 Tax, $00.00 Penalty, Negligence

Action: Redetermine as recommended by Appeals Section.

Cena L. & Yakov Abergel, SR AS 18-734327; 89000246870

1-1-94 to 12-31-95, $129,100.14 Tax, $12,989.55 Penalty, Negligence

West L.A. Wholesale Company, Inc., SR AS 97-009140; 89002034160

1-1-96 to 12-31-96, $00.00 Tax, $00.00 Penalty, Negligence

SR AS 97-009140; 89002034180

1-1-94 to 12-31-95, $129,100.14 Tax, $12,989.55 Penalty, Negligence

Action: Deny the petition for rehearing.

Trade American Card Corporation, SR EA 24-777525; 89000459430

4-1-94 to 3-31-97, $17,042.60 Tax

Action: Deny the petition for rehearing.

James William Birges, SR DH 97-021438; 89000963890

2-1-93 to 3-31-97, $78,375.51 Tax, $ 7,837.55 Penalty, Failure to File

$40,088.45 Penalty, Failure to Obtain a Permit

Action: Deny the petition for rehearing.

FRANCHISE AND INCOME TAX MATTERS, CONSENT

The Board deferred the following matter: Manuel and Fe Juliano, 87458.

With respect to the Franchise & Income Tax Matters, Consent Agenda, upon a single motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, Mr. Chiang not participating in Yuan Ji Su, 89002459600, the Board made the following orders:

David M. Aubertin, 62404

1998, $964.89 Claim for Refund

Action: Sustain the action of the Franchise Tax Board. Mr. Chiang not participating.

Lydia Dodds-Roman, 79183

1998, $222.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Patricia A. & Eugene H. Fields, 77242

1992, $3,130.00 Assessment, $ 751.13 Penalty, Delinquent Filing

$2,347.50 Penalty, Fraud

1993, $4,166.00 Assessment, $3,123.75 Penalty, Fraud

1994, $ 77.00 Assessment, $ 57.75 Penalty, Fraud

Action: Sustain the modified action of the Franchise Tax Board.

Donald & Lori Filipovich, 88990

1996, $6,127.00 Assessment

Action: Sustain the modified action of the Franchise Tax Board.

Michele A. Freedenthal & James D. Hughey, 62130

1998, $1,552.00 Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Harry Gerbasi, 63541

1994, $414.90 Claim for Refund

1995, $ 45.42 Claim for Refund

Action: Sustain the action of the Franchise Tax Board and impose a $750.00 frivolous appeal penalty.

Daniel B. Gilmore, 57647

1997, $251.26 Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Taryn M. Gindt, 77950

1998, $1.00 or more Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Randy Gonzalez & Joan Piazza-Gonzalez, 80243

1998, $917.25 Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Leonard A. Gross, 83321

1991, $4,790.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Susan Hathaway, 61553

1997, $2,572.02 Claim for Refund

Action: Sustain the modified action of the Franchise Tax Board.

Manuel & Fe Juliano, 87458

1996, $1,525.00 Assessment

Action: The Board took no action.

Ron & Kathryn Kruger, 77956

1996, $1,046.00 Claim for Refund

Action: Sustain the modified action of the Franchise Tax Board.

Donald F. La Penna, 78270

1998, $1.00 or more Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

George & Diane L. Land, 77129

1996, $2,649.82 Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

James H. (Deceased) & Barbara S. Lathrop, 77238

1994, $8,106.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Alana D. McAvoy, 61406

1996, $211.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Frederick W. Meyer, 79531

1996, $1,920.00 Assessment, $439.00 Penalty, Delinquent

Action: Sustain the action of the Franchise Tax Board.

Robin N. Owens, 55256

1996, $305.00 Assessment, $59.00 Penalty, Delinquent

Action: Sustain the modified action of the Franchise Tax Board.

Stanley R. Parrish, 62412

1996, $270.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Daniel J. Pomeroy, 63003

1996, $385.00 Assessment

Action: Sustain the modified action of the Franchise Tax Board.

John W. & Donna L. Ringgold, 55262

1995, $472.20 Assessment, $118.00 Penalty, Delinquent

$ 94.40 Penalty, Accuracy-related (Negligence)

Action: Sustain the action of the Franchise Tax Board.

Alicia Jean Robertson, 79945

1998, $365.00 Assessment, $91.25 Penalty, Failure to Furnish Information

Action: Sustain the action of the Franchise Tax Board.

Michael L. Spector, 80368

1998, $542.73 Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Abdel-Rahman Toubat, 57206

1996, $1.00 or more Claim for Refund

Action: Sustain the action of the Franchise Tax Board.

Edgar B. & Priscilla D. Valera, 76303

1996, $1,126.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Lisa Whiseant, 55058

1994, $596.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Scott C. Wilson, 61478

1996, $37.00 Assessment

Action: Sustain the action of the Franchise Tax Board.

Lawrence E. & Janet Wyatt, 80369

1998, $915.50 Claim for Refund

Action: Sustain the modified action of the Franchise Tax Board.

S. James & Effie Cardiges, 40701

1987, $51,194.00 Assessment, $38,395.50 Penalties

1989, $ 9,361.00 Assessment, $ 7,021.00 Penalties

1990, $23,337.00 Assessment, $16,335.00 Penalties

1991, $11,011.00 Assessment, $ 8,258.00 Penalties

Action: Deny the petition for rehearing.

Chas L. Lewis, Inc., 61155

1992, $71.81 Claim for Refund

1998, $46.07 Claim for Refund

Action: Deny the petition for rehearing.

Erwin Rautenberg, 33153

1994, $393,462.00 Assessment

Action: Deny the petition for rehearing.

Yuan Ji Su, 89002459600

1990, $112,281.00 Assessment, $28,070.00 Penalty, Accuracy-related

1993, $ 15,810.00 Assessment, $ 3,162.00 Penalty, Accuracy-related

1994, $ 13,610.00 Assessment, $ 2,722.00 Penalty, Accuracy-related

Action: Deny the petition for rehearing.

David L. Witala, 49620

1997, $3,020.00 Assessment, $ 755.00 Penalty, Delinquent

$1,401.25 Penalty, Demand

Action: Deny the petition for rehearing.

Robert White, 41871

1997, $1.00 or more Claim for Refund

Action: Deny the petition for rehearing.

HOMEOWNER AND RENTER PROPERTY TAX ASSISTANCE MATTERS, CONSENT

The Board deferred the following matters: Lisa Saxton, 76065 and Stephen & Suzanne Diamond, 89002467110.

With respect to the Homeowner and Renter Property Tax Assistance Matters, Consent Agenda, upon a single motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board made the following orders:

Susan L. Recht, 79522

1996, $17.50 Claim for Credit

1997, $ 1.00 or more Claim for Credit

Action: Sustain the 1996 action of the Franchise Tax Board and reverse the 1997 action.

Lisa Saxton, 76065

1998, $1,729.18 Claim for Credit

Action: The Board deferred consideration of this matter.

Isaac Scovell, 88317

1998, $142.50 Claim for Credit

Action: Sustain the action of the Franchise Tax Board.

Kamar Lamar Singletary, 78222

1999, $240.00 Claim for Credit

Action: Sustain the action of the Franchise Tax Board.

Charline Worthy, 88460

2000, $600.00 Claim for Credit

Action: Sustain the action of the Franchise Tax Board.

William Brasseur, 75850

1999, $240.00 Claim for Credit

Action: Grant the petition for rehearing.

Canwar Childs, 63322

1998, $162.50 Claim for Credit

Action: Deny the petition for rehearing.

Stephen & Suzanne Diamond, 89002467110

1993, $247,734.00 Assessment

Action: The Board took no action.

Ralph J. Henz, 60765

1997, $1.00 or more Claim for Credit

Action: Deny the petition for rehearing.

SALES AND USE TAX MATTERS, REDETERMINATIONS, RELIEF OF PENALTY, DENIALS OF CLAIMS FOR REFUND, CONSENT

With respect to the Sales and Use Tax Matters, Redeterminations, Relief of Penalty, Denials of Claims for Refund, Consent Agenda, upon a single motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board made the following orders:

Nurre Caxton Inc., SR EA 013-828361; 79104

1-1-96 to 12-31-98, $66,118.51

Action: Redetermine as recommended by staff.

Surinder S. Sidhu, SR AC 013-831831; 29699

1-1-93 to 3-31-98, $41,256.13

Action: Redetermine as recommended by staff.

Acme Press Inc., SR CHB 021-688328; 89000318690

1-1-94 to 6-30-97, $62,080.51

Action: Redetermine as recommended by staff.

Alfredo Aguilar Rendon, SR Y EH 023-873268; 89000432190

1-1-92 to 6-30-96, $78,450.85

Action: Redetermine as recommended by staff.

Pot O’Gold Sales Inc., SR EAA 024-844668; 36884

7-1-96 to 3-31-99, $69,969.81

Action: Redetermine as recommended by staff.

Motoman Inc., SR S OHA 030-691344; 41244

10-1-94 to 6-30-98, $828,136.46

Action: Redetermine as recommended by staff.

Mellon Leasing Corporation, SP H UT 084-008471; 99984

2-19-99, $110,075.00

Action: Redetermine as recommended by staff.

Lexair Ltd., SP H UT 084-016543; 99855

11-23-99, $1,951,125.00

Action: Redetermine as recommended by staff.

E & G Classics, Inc., SR OHB 097-009494; 92506

7-1-97 to 6-30-98, $144,647.53

Action: Redetermine as recommended by staff.

Surinder Sidhu, SR AC 099-269883; 29698

4-30-93 to 4-30-98, $43,706.42

Action: Redetermine as recommended by staff.

Surinder S. Sidhu, SR AC 099-326323; 29700

4-1-93 to 3-31-98, $17,702.85

Action: Redetermine as recommended by staff.

Elekta Instruments, Inc., SC OHC 099-501287; 61902

10-1-95 to 9-30-98, $480,596.14

Action: Redetermine as recommended by staff.

The Perkins-Elmer Corporation, SR BHA 099-533469; 75705

10-1-94 to 6-30-97, $99,539.03

Action: Redetermine as recommended by staff.

Irvine Photo Graphics Inc., SR EAA 099-574726; 15873

4-1-95 to 6-30-98, $61,805.95

Action: Redetermine as recommended by staff.

Communications & Power Industries, Inc. SR Y GH 099-767279; 77840

10-1-95 to 9-30-98, $932,249.86

Action: Redetermine as recommended by staff.

Sport-Chalet Inc., SR Y AP 017-092540; 110551

1-1-00 to 1-31-00, $63,900.00

Action: Approve relief of penalty as recommended by staff.

Hitachi Telecom (USA) Inc., SC OHC 097-685487; 106972

1-1-00 to 3-31-00, $53,041.40

Action: Approve relief of penalty as recommended by staff.

SWH Corporation, SR Y EA 099-687476; 109422

10-1-99 to 12-31-99, $66,116.79

Action: Approve relief of penalty as recommended by staff.

Ross Stores Inc., SR Y CHA 020-603846; 89000299280

7-1-95 to 9-30-95, $1,249,350.00

Action: Deny of claim for refund as recommended by staff.

American Material Mgt. Alliance Inc., SR EH 025-914786; 106701

1-1-97 to 12-31-98, $142,967.81

Action: Deny of claim for refund 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. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, Mr. Chiang not participating in LSI Logic Corporation, SR Y GH 026-722513; 109068, the Board made the following orders:

XEBEC Management Services Inc., SR Y KH 028-891501; 109803

7-1-98 to 7-19-98, $95,309.54

Action: Approve credit and cancellation as recommended by staff.

Proton America Corporation SP H UT 084-000878; 110044

6-4-98, $343,814.55

Action: Approve credit and cancellation as recommended by staff.

CPSI, Inc., SR JH 097-269758; 111066

5-1-98 to 12-31-98, $69,199.62

Action: Approve credit and cancellation as recommended by staff.

Equine Organics Inc., SR JHF 097-678848; 110012

10-1-95 to 3-31-99, $59,043.62

Action: Approve credit and cancellation as recommended by staff.

U.S. Rentals, Inc., SR Y KHE 012-039780

4-1-95 to 3-31-97, $50,139.20

Action: Approve refund as recommended by staff.

Mercury Air Group Inc., SR Y AS 012-728463; 89000052510

10-1-94 to 9-30-98, $1,363,628.80

Action: Approve refund as recommended by staff.

John W. Kroner, Jr., SR AC 013-727024; 105401

10-1-96 to 9-30-99, $53,011.27

Action: Approve refund as recommended by staff.

Partners by Design, Inc., SR AC 013-807976; 109086

7-1-97 to 6-30-00, $97,441.26

Action: Approve refund as recommended by staff.

AMPEX Data Systems Corporation, SR S OH 019-777281; 89000292050

1-1-98 to 12-31-98, $73,148.48

Action: Refund as recommended by staff.

Pressure Vessel Service Inc., SR Y BHA 020-157652; 91481

7-1-97 to 12-31-98, $59,200.81

Action: Approve refund as recommended by staff.

Hatcher Press Inc., SR BHA 020-605883; 40980

10-1-96 to 9-30-99, $173,987.49

Action: Approve refund as recommended by staff.

Schwing America Inc., SR Y OHA 021-800553; 79068

10-1-98 to 12-31-98, $226,566.96

Action: Approve refund as recommended by staff.

Kirkhill Rubber Company, SR EA 024-084344; 109085

10-1-97 to 6-30-00, $63,661.94

Action: Approve refund as recommended by staff.

ROHR Inc., SR Y OHB 025-626931; 105664

10-1-94 to 12-31-97, $231,197.42

Action: Approve refund as recommended by staff.

American Material Mgt. Alliance Inc., SR EH 025-914786; 57788

1-1-97 to 12-31-98, $357,566.98

Action: Approve refund as recommended by staff.

Tom Lopes Distributing Inc., SR Y GH 026-098940; 105679

1-1-99 to 3-31-99, $58,365.46

Action: Approve refund as recommended by staff.

Tom Lopes Distributing Inc., SR Y GH 026-098940; 105682

10-1-97 to 6-30-99, $448,402.13

Action: Approve refund as recommended by staff.

LSI Logic Corporation, SR Y GH 026-722513; 109068

7-1-00 to 9-30-00, $240,426.08

Action: Approve refund as recommended by staff. Mr. Chiang not participating.

Coram Healthcare Corporation of Northern California, SR Y OH 027-799853; 106068

1-1-98 to 3-31-99, $119,556.48

Action: Approve refund as recommended by staff.

Mark Twain St. Joseph’s Healthcare, SR KHE 028-049133; 80617

7-1-99 to 12-31-99, $91,469.65

Action: Approve refund as recommended by staff.

Schwarz Paper Company, SR Z OHA 030-633396; 103418

7-1-96 to 6-30-99, $220,679.02

Action: Approve refund as recommended by staff.

Bloomberg Inc., Ltd. Ptn., SR S OHB 030-680512; 109284

7-1-97 to 6-30-00, $129,008.58

Action: Approve refund as recommended by staff.

Stein Inc., SR S OH 030-686144; 51923

7-1-99 to 9-30-99, $165,477.63

Action: Approve refund as recommended by staff.

Business Insurance Group Inc., SR KH 052-008652; 30341

4-1-96 to 12-31-99, $55,153.61

Action: Approve refund as recommended by staff.

CORAM Healthcare Corporation of Southern California, SR Y OH 097-080787; 105690

1-1-98 to 3-31-99, $80,462.18

Action: Approve refund as recommended by staff.

Lockheed Martin Corporation, SR OHB 097-591073; 109097

7-1-97 to 9-30-99, $95,253.04

Action: Approve refund as recommended by staff.

Hillman Holdings LLC, SR Y ARF 097-763898; 100009

10-1-00 to 12-31-00, $232,326.38

Action: Approve refund as recommended by staff.

Reliance Steel & Aluminum Company, SR Y AA 098-039890; 49285

10-1-95 to 12-31-98, $124,082.80

Action: Approve refund as recommended by staff.

Balfour Beatty Construction Inc., SR S OHC 099-810837; 97545

1-1-00 to 3-31-00, $143,455.60

Action: Approve refund as recommended by staff.

General Mills Operations, Inc., SR Z OHA 099-914329; 19532

10-1-98 to 6-30-99, $69,475.54

Action: Approve refund as recommended by staff.

SPECIAL TAXES MATTERS, DENIALS OF CLAIMS FOR REFUNDS, CONSENT

With respect to the Special Taxes Matters, Denials of Claims for Refunds, Consent Agenda, upon a single motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Ms. Mandel not participating, the Board made the following orders:

Major Paint Company, CA MT 051-012906; 89000960130

1-1-91 to 12-31-91, $123,113.52

Action: Deny claim for refund as recommended by staff.

Major Paint Company, CA MT 051-012906; 89000960140

1-1-92 to 12-31-92, $158,447.15

Action: Deny claim for refund as recommended by staff.

Major Paint Company, CA MT 051-012906; 89000960150

1-1-93 to 12-31-93, $118,937.36

Action: Deny claim for refund as recommended by staff.

Major Paint Company, CA MT 051-012906; 89000960160

1-1-94 to12-31-94, $106,167.17

Action: Deny claim for refund as recommended by staff.

SPECIAL TAXES MATTERS, CREDITS, CANCELLATIONS AND REFUNDS, CONSENT

With respect to the Special Taxes Matters, Credits, Cancellations and Refunds, Consent Agenda, upon a single motion of Mr. Chiang, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, Mr. Chiang not participating in Shell Oil Products Company, TK Y MT 044-000074; 89000948300, and Ms. Mandel not participating in Metropolitan Life Insurance Company, IT ET 034-000118; 89000895120 in accordance with Government Code section 7.9, the Board made the following orders:

Shell Oil Products Company, TK Y MT 044-000074; 109869

4-1-96 to 6-30-96, $2,844,857.80

Action: Approve credit and cancellation as recommended by staff.

Shell Oil Products Company, TK Y MT 044-000074; 109871

1-1-96 to 3-31-96, $4,087,851.03

Action: Approve credit and cancellation as recommended by staff.

Shell Oil Products Company, TK Y MT 044-000074; 89000948300

1-1-96 to 4-30-96, $9,917,167.12

Action: Approve refund as recommended by staff. Mr. Chiang not participating.

Metropolitan Life Insurance Company, IT ET 034-000118; 89000895120

1-1-93 to 12-31-96, $470,135.14

Action: Approve refund as recommended by staff. Ms. Mandel not participating in accordance with Government Code section 7.9.

PROPERTY TAXES MATTERS, NOT SUBJECT TO CONTRIBUTION DISCLOSURE STATUTE

The Board deferred consideration of the following matter: Dana Railcare Services (6192).

With respect to the Property Taxes Matters not subject to Contributions Disclosure Statute agenda (Exhibit 4.16), upon a single motion of Mr. Chiang, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Ms. Mandel not participating in accordance with Government Section code 7.9, the Board made the following orders:

AT&T Communications (2310)

1996, ($62,900,000.00) Excessive Assessment

1997, ($63,000,000.00) Excessive Assessment

1998, ($70,000,000.00) Excessive Assessment

1999, ($86,800,000.00) Excessive Assessment

Action: Adopt the assessed values recommended by staff. Ms. Mandel not participating.

Dana Railcare Services (6192)

1999, $1,578.17

Action: The Board deferred consideration of this matter.

Harnischfeger Corporation (5718)

2000, $29.14

Action:Approve the refund of Private Railroad Car Taxes overpayment as recommended by staff. Ms. Mandel not participating.

Board Roll Changes

1997 Roll

1998 Roll

1999 Roll

2000 Roll

Action: Approve Roll Correction Batch Roster 00-13 as recommended by staff. Ms. Mandel not participating.

CORPORATE FRANCHISE AND PERSONAL INCOME TAXES HEARING

Michael & Melanie Cervi, 87230

1996, $1,915.00 Assessment

For Appellant: Michael A. Cervi

For Franchise Tax Board: Jean Cramer, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue: Whether respondent properly used appellants’ non-California source military income in the calculation of appellants’ California tax liability.

Action: Upon motion of Mr. Chiang, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the appeal be submitted for decision.

BUSINESS TAXES APPEALS HEARINGS

Blaisdell Construction, Inc., SR KHE 97-324306; 37274

11-3-99, $27,267.25 Claim for Refund

For Petitioner: Lynette Blaisdell

For Sales and Use Tax Department: Jeffery Graybill, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue: Whether the contract provision, assembly and affixation, of a panel bridge across the South Fork of the Merced River in Yosemite National Park is a "construction contract" pursuant to Title 18, California Code of Regulations, Section 1521.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

The Coca Cola Company, SZ OHC 98-040866; 89002095540; 47179

1-1-93 to 12-31-95, $91,951.12 Tax

For Petitioner: No Appearance

For Sales and Use Tax Department: David H. Levine, Counsel

Action: The Board took no action.

El Camino Resources, Ltd., SZ AC 13-723056; 89000069210

7-1-90 to 9-30-94, $12,440,651.00 Tax

For Petitioner: Glenn Bystrom, Representative

Kenneth J. Leong, Tax Manager

Scott E. Norman, Tax Director

For Sales and Use Tax Department: Jeffery Graybill, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue: Whether the failure of either party to insert the date to which the period for issuance of a deficiency notice was extended, in the fifth of seven waivers of the statute of limitations, invalidates the Board’s determination for periods prior to July 1, 1992.

Whether the amount paid by Builder’s Emporium to petitioner solely in consideration of petitioner’s releasing the customer from its lease obligations, are not taxable lease receipts because all back rents were paid up through the termination date.

Whether the lease to Northrop Corporation should be eliminated from the projection and assessed on an actual basis because of the unusual circumstances behind this transaction.

Action: Upon motion of Mr. Parrish, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board approved the revised recommendation of the Appeals Section with regards to Item No. 11 – Disallowed Exempt Lease Receipts of the Decision and Recommendation.

Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be granted with regards to Issue 1.

Mr. Klehs moved to submit petition with regard to Issue 2. No vote was taken.

A substitute motion was made by Mr. Andal to grant as to Issue 2.

Mr. Parrish seconded the motion and duly carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs voting no.

Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the remainder of the petition be submitted for decision.

The Board recessed at 11:30 p.m. reconvened at 11:40 p.m. with Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel present

FINAL ACTION ON APPEALS HEARD APRIL 19, 2001

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board sustained the action of the Franchise Tax Board in the appeal of Michael & Melanie Cervi, 87230.

FINAL ACTION ON PETITIONS HEARD APRIL 19, 2001

Mr. Klehs motion to redetermine the petition of El Camino Resources, Ltd., SZ AC 13-723056; 89000069210, in regards to Issue 3 as recommended by the Appeals Section. The motion was seconded by Mr. Andal but failed to carry, Mr. Klehs voting yes, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting no.

Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs voting no the Board ordered that the petition of El Camino Resources, Ltd., SZ AC 13-723056; 89000069210, be granted as to Issue 3.

The Board adjourned at 11:50 a.m.

The foregoing minutes are adopted by the Board on June 21, 2001.