Headline

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

ANNOUNCEMENT OF CLOSED SESSION

The Chairman announced that in addition to the cases named in the Public Agenda Notice, the Board will discuss Attorney Fees in Vehicle Smog Impact Fee Litigation, Anna Jordan and Mark Glickman v. DMV and SBE, et al. Third Appellate District Case No. C031365. This case was added to the Closed Session agenda under the provisions of Government Code Section 11126(e) and 11126.3(d). The Board recessed at 9:30 a.m. and reconvened immediately in closed session with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel.

CLOSED SESSION

The Board met to discuss personnel matters, Revenue and Taxation Code 7093.5 and 50156.11, settlements and pending litigation.

The Board recessed at 9:35 a.m. and reconvened immediately in open session with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel.

EXECUTIVE DIRECTOR'S REPORT

Ms. Masterton reported that there was no Executive Directorís Report.

BOARD APPROVAL OF FINANCE LETTER REQUESTS

Ms. Sally Lee, Deputy Director, Administration, presented an overview of the 2000-01 Finance Letter request for the Revenue Database Consolidation Project (i.e., integration of STARS database into IRIS) which was submitted to the Department of Finance as required on February 14, 2000.

RETIREMENT RESOLUTIONS

Upon motion of Mr. Parrish, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted the following resolutions (Exhibit 2.26) extending its best wishes on their respective retirements and its appreciation for their service to the Board and the State of California:

E.L. (Les) Sorensen, Jr., Executive Director, Board of Equalization

A. Dale Blue, Supervising Tax Auditor II

Richard A. Slater, Business Taxes Compliance Supervisor III

Donald L. Simpson, Staff Programmer Analyst

Lawrence M. Girouard, Senior Taxes Representative

William F. Ryle, Business Taxes Compliance Supervisor III

Marilyn H. Ferrasci, Senior Taxes Representative

Judith Masasi, Tax Technician II

BOARD MEETING MINUTES

Upon motion of Mr. Parrish, seconded by Mr. Andal, and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the minutes of its meetings of December 7-9, 1999 & January 5-6, 2000.

SPECIAL TOPIC SURVEY-ASSESSMENT OF TAXABLE POSSESSORY INTERESTS

The Board deferred consideration of this matter until itís April meeting.

LEGISLATIVE COMMITTEE REPORT

Margaret Shedd, Legislative Counsel, recommended approval of the Legislative Committee Report.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the committee report. (Exhibit 2.27).

BUSINESS TAXES COMMITTEE REPORT

James Speed, Deputy Director, Sales and Use Tax Department, recommended approval of the Business Taxes Committee Report.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the committee report. (Exhibit 2.28).

CUSTOMER SERVICES & ADMINISTRATIVE EFFICIENCY COMMITTEE

Delena Bratton, Chief, Technology Services Division, recommended approval of the Customer Services & Administrative Efficiency Committee Report.

Upon motion of Mr. Parrish, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted the committee report (Exhibit 2.29).

CHIEF COUNSEL MATTERS - RULEMAKING

Upon motion of Mr. Chiang, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted the changed version of Emergency Telephone Users Surcharge Tax Regulation 2406, Liability for Surcharge Billed Through Billing Agents. A copy of the regulation as adopted is incorporated in these minutes by reference (Exhibit 2.30).

CHIEF COUNSEL MATTERS - TAXPAYER BILL OF RIGHTS REIMBURSEMENT CLAIMS

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

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the reimbursement claim of Cossette Investment Company, TBR99-002-F, Case ID: 48770, be denied.

Dr. Connell entered the Boardroom and Ms. Mandel left.

APPLICATIONS FOR REVIEW, EQUALIZATION AND ADJUSTMENT OF ASSESSMENTS

Upon motion of Dr. Connell, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Parrish and Dr. Connell voting yes, Mr. Klehs voting no, Mr. Chiang not participating, the Board moved to find the value of the citiesí interest in the appeals of City of Long Beach, ARA97-002 and City of Los Angeles, ARA97-003, 26431, to be zero.

Upon motion of Mr. Andal, seconded by Dr. Connell and duly carried,

Mr. Andal, Mr. Parrish and Dr. Connell voting yes, Mr. Klehs voting no, Mr. Chiang not participating, the Board moved to make part of the record the U.S. Supreme Courtís decision to deny the writ.

The Board recessed at 9:40 a.m. and reconvened immediately in closed session with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Dr. Connell.

CLOSED SESSION

The Board met to discuss personnel matters, Revenue and Taxation Code 7093.5 and 50156.11settlements and pending litigation.

The Board recessed at 10:20 a.m. and reconvened immediately in open session with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel.

ANNOUNCEMENT OF ACTIONS TAKEN IN CLOSED SESSION

The Board announced Mr. Ray Hirsig has been appointed as the new Deputy Director of the Sales and Use Tax Department.

The Board announced Mr. Bob Austin has been appointed as the Chief of the Technology Services Divison.

BUSINESS TAXES MATTERS

The Board deferred voting on the Memorandum Opinion in the matter of John Chris Mogannam, SRKH 99-108404, Case ID: 89002106580.

General Electric Capital Auto Lease, SR OHB 30-625003-020, Case ID: 89000815460

1-1-93 to 12-31-96, $662,124.24

Considered by the Board: January 5, 2000

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

Action: Upon motion of Mr. Andal, seconded by Mr. Chiang and duly carried,

Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs, Ms. Mandel voting no, the Board ordered that the petition be granted.

BMW Financial Services NA, Inc., SS OHA 30-663830-020, Case ID: 89000841740

4-1-92 to 3-31-93, $505,831.17

Considered by the Board: January 5, 2000

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. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs and Ms. Mandel voting no, the Board ordered that the petitions be granted.

Harshida and Harivadan Parmar, CR HQ 02-001189-010, 89000005080

4-1-88 to 3-6-96, $39,669.93

CP HQ 50-000975-010, 89000959570

1-1-89 to 3-6-96, $23,383.66

Considered by the Board: January 5, 2000

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

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

SMCI, Inc., SR CHB 99-109681-010, 89002107050

1-1-93 to 3-31-96, $41,728.01

Considered by the Board: January 9, 1999

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. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board granted the petition for rehearing.

Xtra Oil Co., SY CH 21-684417-010, 89000318200

7-1-93 to 6-30-96, $12,624.00

Considered by the Board: November 18, 1999

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

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

Bryan A. Nick, SR BHA 99-233177-010, 89002159860

3-4-93 to 3-31-96, $5,599.04

Considered by the Board: November 18, 1999

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

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

The Vons Companies, Inc., SY AP 17-632731-010, 89000195670

1-1-90 to 1-3-93, $0

Considered by the Board: August 13, 1998

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

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

JBL Incorporated, SR AC 13-807150-010, 89000080860

7-1-93 to 6-30-96, $0

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

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

Upon motion of Mr. Chiang, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs and Ms. Mandel voting no, the Board granted the petition for rehearing of Albert Kelly Ruiz, SR AP 11-762085-020.

FRANCHISE AND INCOME TAXES MATTERS

Contribution: Disclosures pursuant to Government Code Section 15626: No contributions were disclosed for any of the following-listed matters Allied Signal, Inc. through Arthur L. & Geraldine Valdez.

Upon motion of Mr. Klehs, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish voting no, the Board adopted a decision in the appeal of Allied Signal, Inc., 98R-1209, 8900249070, reversing the action of the Franchise Tax Board. Mr. Andal moved to publish the decision in the matter of Allied Signal, Inc., 98R-1209. There was no second and he withdrew his motion.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Dennis R. Di Ricco, 98R-0464, 89002460630, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Gary L. Galindo, 99R-0316, 89002469310, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Peter and Barbara Mikacich, 99R-0206, 89002466540, modifying the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Gerald N. & Judy A. Morrow, 99R-0067, 89002466840, sustaining the action of the Franchise Tax Board.

Upon motion of Ms. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Paulette Powell, 98R-1126, 89002465010, modifying the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Maurice Rogers, 98A-1220, 89002458740, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board granted the appeal of appeal of Arthur H. and Suzanne G. Stolnitz, 98R-0078, 89002465890, reversing the action of the Franchise Tax Board.

Upon motion of Ms. Mandel, seconded by Mr. Parrish and duly carried, Mr. Andal, Mr. Parish and Ms. Mandel voting yes, Mr. Chiang voting no, Mr. Klehs not participating, the Board granted the appeal of John and Robin Sullivan, 98R-1273, 89002465940, reversing the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Thomas and Jill Weintraub, 99A-0024, 89002466160, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted a decision in the appeal of Michael and Sandra Wolverton, 99A-0142, 89002466590, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Klehs, seconded by Mr. Andal and duly carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang voting no, the Board ordered that the request for rehearing in the appeal of Jeffrey G. and Sylvia Balkin, 97A-1086, 89002466360, be denied.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the request for rehearing in the appeal of Higgins Brick Company, 98A-0528, 89002463050, be denied.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the request for rehearing in the appeals of Gene Ratkowski, 98A-0179, 98A-0604, 89002458550, 98A-0604, 89002458560, 98A-0769, 89002458570, be denied.

Upon motion of Mr. Klehs, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang voting no, the Board ordered that the request for rehearing in the appeal of Arthur L. and Geraldine A. Valdez, 98A-0660, 89002466070, be denied.

BUSINESS TAXES MATTERS

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

Upon motion of Ms. Mandel, seconded by Mr. Chiang and unanimously carried, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish, Mr. Andal not participating, the Board approved the staff recommendations with respect to redeterminations.

Upon motion of Ms. Mandel, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish and Ms. Mandel voting yes, Mr. Klehs, Mr. Chiang not participating, the Board approved the staff recommendations with respect to refunds presented to the Board for consideration without hearing (Exhibit 2.31).

[G]Contribution: Disclosures Pursuant to Government Code Section 15626: No disqualifying contributions were disclosed.

Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried,

Mr. Andal, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs voting no, the Board approved the staff recommendation with respect to refunds presented to the Board for consideration in the matter of Susan Lorie Tylock, SR DHF 99-13928. (Exhibit 2.32).

(Motion expunged)

Mr. Andal ordered that the previous motion in the matter of Motivpower Industries, Inc., SR OH 99-476380 be expunged.

Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried,

Mr. Andal, Mr. Parrish, Mr. Chiang voting yes, Mr. Klehs and Ms. Mandel voting no, the Board approved the staff recommendation with respect to the refund presented to the Board for consideration without hearing in the matter of Motivpower Industries, Inc.,

SR OH 99-476380 without hearing. (Exhibit 2.33).

Upon motion of Klehs, seconded by Parrish and unanimously carried,

Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board adopted the Appeals Matters Consent Schedule dated February 24, 2000 with respect to Hearing Notices Sent Ė No Response and Appearance Waived, Hearing Requests Withdrawn and Petitions for Rehearing (Exhibit 2.34).

FRANCHISE AND INCOME TAXES MATTERS

(Motion expunged)

Mr. Andal ordered that the previous motion in the matter of Franchise and Income Tax Opinions, Decisions and Petitions for Rehearing Schedule dated February 24, 2000, be expunged.

Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the staff recommendations with respect to Franchise and Income Tax Opinions, Decisions and Petitions for Rehearing Schedule dated February 24, 2000, except the Board deferred consideration of Kimberly-Clark Corporation, 93R-0091,

93R-0898, 93A-1129, Sundstrand Corporation, 99A-0375 and Joseph A. Gimelli, 99I-0133 (Exhibit 2.35).

BUSINESS TAXES MATTERS

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the staff recommendations with respect to Business Tax Matters Consent Schedule dated February 24, 2000 with respect to redeterminations, relief of penalty and refunds. The Board deferred consideration of Bilt Best of California, Inc., SR DHF 99-957460 and Atlantic Richfield Company, MD MT 07-000812. (Exhibit 2.36).

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board approved the staff recommendations with respect to Business Tax Matters Consent Schedule dated February 24, 2000 with respect to credits, cancellations, and refunds (Exhibit 2.37). Mr. Klehs and Ms. Mandel did not participate in the decision of Genetech, Inc., SY BH 19-678161. Ms. Mandel did not participate in the matters of Core-Mark International, Inc., CR ET 02-000788, Core-Mark International, Inc., CR ET 02-000788, Japan Tobacco Int. U.S.A., Inc., CR ET 02-000814, Grocers Specialty Company, CR ET 02-001083, American Procurement & Logistics Co., CR ET 02-001154, Ralphs Grocery Company, CR ET 02-001194. Mr. Chiang did not participate in the decision of GTE California, Inc., TU ET 35-100012.

PROPERTY TAXES MATTERS

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang voting yes, Ms. Mandel not participating in accordance with Government Code Section 7.9, the Board adopted the Property Tax Matters Nonappearance Matters Not Subject to Contribution: Disclosure Calendar dated February 24, 2000, consisting of an Audit, Nonunitary Escaped Assessment, Private Railroad Car Refunds nd Board Roll Changes.

Upon motion of Ms. Mandel , seconded by Mr. Parrish and duly carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal voting no, the Board approved the finding and decision in the appeal of Pacific Gas & Electric Company (135), SAU99-019, 18182.

Upon motion of Mr. Parrish, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Mr. Chiang voting yes, Ms. Mandel not participating, the Board approved finding and decision in the appeal of Qwest Communications Corporation (2463) SAU99-001, 16655.

ADMINISTRATIVE MATTER

Ms. Masterton announced that the appointment of Bob Austin, Chief, Technology Services Division, is effective immediately. The appointment of Ray Hirsig, Deputy Director, Sales and Use Tax Department, is effective March 18, 2000.

The Board recessed at 10:45 and reconvened at 10:50 a.m. with

Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel present.

FRANCHISE AND INCOME TAXES HEARINGS

Mark Coccimiglio, 99A-0411, 17121

1983, $742.79

For Appellant: Mark Coccimiglio
For Franchise Tax Board: Mark McEvilly, Tax Counsel
Jozel Brunette, Counsel

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

Issue: Whether appellant has shown that respondent abused its discretion in not refunding interest paid.

Whether appellant has shown that the Internal Revenue Service (IRS) abated interest accrued on a 1983 federal tax deficiency pursuant to Internal Revenue Code (IRC) section 6404(e).

Mr. Chiang entered the Boardroom.

Action: Upon motion of Mr. Parrish, seconded by Mr. Klehs and duly carried,

Mr. Andal, Mr. Parrish, Mr. Klehs voting yes, Mr. Chiang and Ms. Mandel voting no, the Board ordered that the action of the Franchise Tax Board be modified.

Andrea Solari, 99A-0281, 27643

1990, $26,877.20

1991, $7,012.80

1992, $29,741.25

For Appellant: No Appearance
For Franchise Tax Board: Kathleen Cooke, Tax Counsel

Action: The Board took no action.

Lynne S. Harris, 99A-0156, 89002467880

1987, $27,283.06

1989, $11,353.60

1990, $6,541.20

For Appellant: Lynne S. Harris
For Franchise Tax Board: Mark McEvilly, Tax Counsel

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

Issue: Whether appellant has met her burden to prove error in the proposed assessments and underlying federal actions.

Whether appellant is entitled to relief as an innocent spouse.

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

H.J. Heinz Company, 98R-0316, 89002462800

4-30-87, $102,396.00

4-30-88, $471,317.00

4-30-89, $14,606.00

For Appellant: Robert T. Manicke, Attorney
Barbara J. Deem
For Franchise Tax Board: Jon Jensen, Tax Counsel

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

Issue: Whether appellant has shown that certain sales of its product did not constitute sales to the United States government, within the meaning of Revenue and Taxation Code section 25135, subdivision (b).

Appellantís Exhibit: Affidavit of Barbara J. Deem(Exhibit 2.38)

Respondentís Exhibit: Exhibit C (Exhibit 2.39)

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

AMFAC, Inc., 98A-0262, 89002459150

12-31-84, $299,772.00

12-31-85, $1,160,862.00

12-31-86, $797,569.00

For Appellant: No Appearance
For Franchise Tax Board: Jon Jensen, Tax Counsel

Action: The Board took no action.

FINAL ACTION ON APPEALS HEARD FEBRUARY 24, 2000

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the appeal of Lynne S. Harris, 99A-0156, 89002467880, be granted.

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the appeal of H.J. Heinz Company, 98R-0316, 89002462800, be denied.

The Board adjourned at 11:45 a.m.

The foregoing minutes are adopted by the Board on April 6, 2000