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in re: Franchise Tax Board.

NOTICE OF APPROVAL OF REGULATORY ACT10N

Regulatory Action:. Government Code Section 11349.3

Title 18, California Code of Regulations

Adopt sections:. 23663-1, 23663-2, 23663-3, OAL Matter Number: 2018-0808-01 23663-4, 23663-5

Amend sections: Repeal sections:` OAL Matter Type: Regular (S)

This action .establishes a process for addressing defective elections to assign ta~c credits between affiliated corporations. The adopted regulations establish how credits are allocated when a defective election has occurred and provide flexibility in determining how. creditsare allocatedwhen there is agreement between the parties involved in a defective .election. The regulations also give tax payers one year to correct certain errors. in defective elections.

QAL approves this regulatory action pursuant to section 11349.3 of the Government Code. This regulatory action becomes effective on 9/18/2018.

Date: September 18, 2018 /~~~~ .~ %~ ~.,,~.,.2~ ./' Dale P, Mentink Senior Attorney

For: Debra M. Cornez Director

Original• Selvi Stanislaus, Executive Officer

Copy: Christy Keith

STATE OF CALIFORNIA-OFFICE OF ADMINISTRATION LAW

NOTICE PUBLICATION/REGULATIONS SUBMISSIONSTD. 400 (REV 01-2013)

per agencyrequestre U est

(See Instructions on reverse)

OAL FILE NUMBERS

NOTICE FILE NUMBER

Z-2017-1024-02NOTlfy FILE NUMBER

q 10~4-D REGULATORY ACTION NUMBER

2018-10 10-05SEMERGENCY NUMBER

For use by Office of Administrative Law (OAL) only

NOTICE

2018 OCT 10 P 2: 05

NOTIC5

WfS OCT f O P 2: OS

OFFICE OFADMINISTRATIVE LAW

REGULATIONS

For use by Secretary of State only

ENDORSED -FILEDIn the office of the Secretary of State

of the State California

NOV 20 2018

3:59 p.m

ENDORSED a FILED

3 _, r1-p · 41

AGENCY WITH RULEMAKING AUTHORITY

Franchise Tax Board AGENCY FILE NUM8ER(II any)

A, PUBLICATION OF NOTICE (Complete for publication in Notice Register) 1. SUBJECT OF NOTICE

Apportionment & Allocation of Partnership Income TITLE(S) FIRST SECTION AFFECTED 2. REQUESTED PUBLICATION DATE2, RE UESTE DATE

3, NOTICE TYPE Notice re Proposed Regulatory ActionRegulato Action Other

4, AGENCY CONTACT PERSON TELEPHONE NUMBER FAX NUMBER (Optional)

OAL USEONLY

DAL USE ON

ACTION ON_PROPOSED NOTICE Approved asSubmitted·_Approved 11s Approved as

ModifiedDisapproved/ Withdrawn

NOTICE REGISTER NUMBER PUBLICATION DATE

11/3/2017s---~01 B, SUBMISSION OF REGULATIONS (Complete when submitting regulations)

1a. SUBJECT OF REGULATION(S)

Apportionment & Allocation of Partnership Income

1 b, ALL PREVIOUS RELATED OAL REGULA TORY ACTION NUMBER(S)

2, SPECIFY CALIFORNIA CODE OF REGULATIONS TITLE{S) /\ND SECTIDN(5) (Including tltle 26, If loxlcs rolatedl

SECTION(S) AFFECTED (List all section number{sl

individually. Attach additional sheet if needed,)

ADOPT

AMEND

2513 7-1, 1 7951-4

TITLE(S)

18 REPEAL

3, TYPE OF FILING

Regular Rulemaking (Gov. Code§ 11345)

Resubmltta I of disapproved or withdrawn nonemergency filing (Gov. Code§§ 11349.3, 11349.4)

Emergency (Gov. Code, § 11346.1(6))

Certificate of Compliance: The agency orncer named below certifies that this agency complied with the provisions of Gov. Code § § 11346.2-11347,3 either before the em erg ency regula tlon was adopted or within the ti me period required by statute.

Resubmittal of disapproved or withdrawnemergency filing (Gov. Code, §11346.1)Resubmlttal of disapproved or withdrawn emergency nling (Gov. Code, §11345,1)

Emergency Readopt (Gov.Code, §11346,l(h)) Emergency Re~dapt (Gov.

File&Prlnt

Other(Specify)

Changes Without RegulatoryEffect (Cal. Cade Regs,, title 1, §100)

Changes Without Regu I atory

PrintOnly

4. ALL BEGINNING AND ENDING DATES OF AVAILABILITY OF MODIFIED REGULATIONS AND/OR MATERIAL ADDED TO THE RULEMAKING FILE (Cal. Code Regs, title 1, §44 and Gov. Code §11347.1)4, />.LL BWNNING AND ENDING DATES OJ' AVAILABILITY OF MODIFIED REGULATIONS AND/DR MATERIAL ADDED TO THE RULEMAKING FILE (Cal. Code Regs, title 1, §44 and Gov. Code §11347.1)

2/15/2018-3/5/2018 5. EFFECTIVE DATE OF CHANGES (Gov. Code,§§ 11343.4, 11346.1 (di; Cal, Code Reg,. title 1, §100 )S, EFFECTIVE DATE OF CHANGES (Gov. Code,§§ 11343.4, 11346.1 (di; Cal, Code Reg,. title 1, §100 I

Effective January 1, April 1, July 1, orOctober 1 (Gov, Code § 11343.4(a))Effec!ive January 1, April 1, July 1, or

~ October 1 (Gav, Code §11343.4(a)) · Effective on filing withSecretary of stateEffective on filing wllh Secretary of $!ale

§100 Changes WithoutRegulatory Effect

Effectiveother (Specify) Erreotlva §1 oo Changes Wltl1out

Regul•1ory Effect

6, CHECK IF THESE REGULATIONS REQUIRE NOTICE TO, DR REVIEW, CONSULTATION, APPROVAL OR CONCURRENCE BY, ANOTHER AGENCY OR ENTITY

Department of Finance (Form STD. 399) (SAM §6660)Department of Finance (Form STD. 3~9) (SAM §5660)

Other (Specify)

Fair Political Practices Commission State Fire Marshal

7, CONTACT PERSON

Christy Keith TELEPHONE NUMBER

(916) 845-6080(916) 845~6080 FAX NUMBER (Optional) E·MAIL ADDRESS (Optional)

Christy .Ke ith@ft b.c a.gov

B. I certify that the attached copy of the regulation(s) Is a true and correct copy of the regulation(s) Identified on this form, that the information specified on this form is true and correct, and that I am the head of the agency taking this action,

or a designee of the head of the agency, and am authorized to make this certification.or a de.slgnee of the head of the agency, and am authorized to make this certification, SIGNATURE OF AGENCY HEAD OR DESIGNEE

TYPED NAME AND TITLE OF SIGNATORY

Christy Keith, Regulations Coordinator

DATE

10/9/18/o 1 I CZ

For use by Office of Administrative Law (OAL) only

ENDORSED APPROVED

NOV 2 0 2018

Office of Administrative Law

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In Iha offlce of the 5oorewy of Stale 'NUMBE]3S z-otor nf 1"'P <:;tate of GalWomla

NOV 20 2018.

.LY. □· :· □· -, □ Submllled , . . · Modified Withdrawn

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5tAT.'O,F CALIFORNIA-OFFICE

NOtlCE PUBLIC~Q~lB1=GULATI ;ro. 4D0 IREV, 01-20131