On January 13, 2010, the California Franchise Tax Board (FTB) held a hearing regarding proposed amendments to Cal. Reg. § 25136. Essentially, the changes would amend Cal. Reg. § 25136 to allow for activities conducted by third parties to be included in taxpayers’ California costsof- performance analysis and calculations. Commentators raised questions regarding the effective date of the regulation changes, which is currently not specified. The spokesperson for the FTB stated that it is the FTB’s position that the effective date would be January 1, 2008; however, they would investigate whether it could be earlier in response to comments. Other commentators asked for clarification on: (1) changes made to the definition of income-producing activity, (2) additional information on how the FTB would view situations where the taxpayer contracts with a third party and that person subcontracts the service, and (3) clarification on specific language in the examples. The FTB indicated that they would research each of the issues raised and provide written responses addressing all the points. Thus, additional feedback from the FTB is expected very soon.