When you appeal a California sales tax or income tax bill to the Office of Tax Appeals, can the OTA panel decide that a tax regulation conflicts with the governing statute and refuse to apply that regulation to your case?

Plain-English summary

Until 2017, California's Board of Equalization handled both administering a wide range of state taxes and hearing taxpayer appeals on those taxes (and on Franchise Tax Board taxes). The Legislature broke that combined role apart through AB 102 (2017), creating two new bodies:

• The California Department of Tax and Fee Administration (CDTFA) took over administration of sales and use taxes and many other business taxes and fees.
• The Office of Tax Appeals (OTA), an independent appeals body, took over the Board's adjudicative function. Three-member panels of tax-experienced adjudicators decide appeals from CDTFA and FTB tax assessments.

When OTA was set up, it inherited "all of the duties, powers, and responsibilities of the Board necessary or appropriate to conduct appeals hearings" (Government Code section 15672). For decades before that transfer, the Board of Equalization had decided cases where taxpayers argued that a regulation written by FTB or by the Board itself was inconsistent with the governing statute and shouldn't be applied to them. The Board would (with deference to the regulating agency) sometimes uphold and sometimes set aside the regulation as applied to the taxpayer.

In 2023, OTA proposed a regulation that would have closed off this kind of challenge in OTA appeals. After public objection, OTA withdrew the proposal and asked the AG for an opinion on the underlying authority question. CDTFA and FTB had taken the position that OTA panels can't hear regulation challenges, and at least one OTA panel agreed (Bed Bath & Beyond, 2022). Public commenters disagreed.

The AG sided with the public commenters. OTA panels can adjudicate as-applied statutory challenges to FTB and CDTFA regulations during a taxpayer appeal. The reasoning:

• The Board of Equalization had this authority for over half a century, and the Legislature transferred all of the Board's adjudicative authority to OTA.
• The Administrative Procedure Act (Government Code section 11342.2) makes a regulation invalid if it conflicts with the governing statute. The Board's longstanding view, reaffirmed in In the Matter of the Appeal of: Safeway, Inc. (2005), was that the duty to hear an appeal implies the duty to apply the correct law, which means deciding which of a conflicting statute and regulation governs.
• The Board exercised this authority in numerous published decisions over the decades, including occasions where it set aside an FTB regulation as inconsistent with statute.

OTA must apply Yamaha v. State Board of Equalization (1998) 19 Cal.4th 1 deference to the agency that wrote the regulation, just as a court would on judicial review. But appropriate deference doesn't mean automatic application. If the regulation can't be reconciled with the statute in the taxpayer's circumstances, OTA applies the statute and not the regulation.

The opinion makes clear what OTA can't do: it can't strike a regulation from the California Code of Regulations, and its conclusions about a regulation's invalidity bind only the specific appeal before it. Other OTA panels and other taxpayers aren't bound by the result. The promulgating agency keeps the regulation on the books and can apply it elsewhere unless and until a court strikes it.

What this means for you

If you are a California taxpayer with a pending or potential appeal to OTA

You can challenge how a CDTFA or FTB regulation is being applied to your facts. If you believe the regulation reads beyond what the statute authorizes, or alters or enlarges the statutory text, raise that statutory-conflict argument in your OTA appeal. The panel can consider it. Frame the challenge as "as applied to my circumstances" rather than as a facial challenge to the regulation itself, since the panel can't invalidate the regulation generally.

Build the brief around: (1) the governing statute, (2) the regulation's text, (3) the conflict (alteration, enlargement, or contradiction), (4) Yamaha deference principles and why they don't save the regulation in your circumstances, and (5) how applying the statute (not the regulation) leads to a different (better) result for you.

If you are a tax attorney or CPA representing a California taxpayer

This opinion reopens a strategic option that some OTA panels had been closing off. You can litigate as-applied statutory challenges to FTB and CDTFA regulations. The leading Board precedents (Save Mart, Safeway) are still useful authority because they establish the analytical framework the AG opinion endorses.

Don't expect a precedential OTA opinion striking a regulation broadly. The opinion makes clear OTA's analysis runs only to the specific taxpayer. But a string of consistent OTA decisions agreeing that a particular regulation conflicts with statute as applied creates a paper trail that can support later litigation, agency rulemaking pressure, or settlement use.

If you are a CDTFA or FTB regulation drafter or counsel

OTA panels will continue to evaluate your regulations for statutory consistency in individual taxpayer appeals. Draft regulations to track the statute closely; avoid extension language that could be characterized as exceeding the statutory grant. When you defend a regulation in an OTA appeal, lead with Yamaha deference, but also be prepared to defend the regulation's substantive consistency with the statute.

If a regulation is repeatedly challenged in OTA appeals and panels are repeatedly setting it aside as applied, treat that as a signal that the regulation may be in legal trouble. Consider rulemaking amendments or seeking a binding court determination.

If you are an OTA panel adjudicator or staff

Your authority is settled by this opinion. You can hear regulation-validity challenges as part of taxpayer appeals; you must give Yamaha deference; you can decline to apply a regulation in the specific case if it conflicts with the governing statute as applied. You cannot remove the regulation from the Code of Regulations or bind other panels or taxpayers.

The opinion implicitly endorses the dissent in Bed Bath & Beyond (2022) and the Board of Equalization's pre-2017 practice. Cite Safeway and Save Mart for the analytical framework.

If you are a state legislator considering tax-administration reform

The opinion confirms that OTA's adjudicative authority, including authority to evaluate regulation-statute conflicts, is a legislative grant transferred from the Board of Equalization. The Legislature could narrow OTA's scope (close off regulation challenges) or expand it (give OTA authority to issue precedential rulings on regulation validity that bind other panels) by amending Government Code sections 15670 et seq. The current default is the framework this opinion describes.

If you are a public-interest tax policy advocate

This opinion preserves a meaningful taxpayer-protection function. Without OTA's authority to set aside conflicting regulations as applied, taxpayers' only remedy would be to pay the disputed tax and file a refund suit in superior court (Government Code section 15677). That's a high cost barrier. OTA-level review keeps the as-applied check in an accessible, lower-cost forum.

If you are an administrator of a different California adjudicative body

The reasoning here is portable to any administrative body that inherits adjudicative authority from a predecessor agency that exercised regulation-validity review. If your body's enabling statute transferred "duties, powers, and responsibilities" wholesale, the historical practice of the predecessor likely transfers along with it.

Background and statutory framework

The California Constitution at article XIII, section 17 establishes the Board of Equalization. The Board administers certain constitutionally and statutorily designated taxes (property, insurer, alcoholic beverage). Until 2017, it also administered many additional business taxes and fees and adjudicated taxpayer appeals.

In 2017, the Legislature passed AB 102 (Stats. 2017, ch. 16) in response to concerns that the Board's "operational culture" had led to "inappropriate interventions by board members in administrative and appeal-related activities," producing "inconsistencies in operations," "activities contrary to state law," and "significant errors." AB 102 transferred the Board's tax-administration responsibilities to the new CDTFA (Government Code section 15570) and the Board's adjudicative responsibilities to the new OTA (Government Code section 15670). The Board kept its constitutionally-required functions.

OTA panels are three members each, with required tax law experience (Government Code section 15670(c)). Smaller appeals can be heard by a single adjudicator (Government Code section 15676.2). OTA hearings track the Administrative Procedure Act (Government Code section 11500 et seq.). Decisions are written opinions, which can be designated precedential (5 CCR section 30501-30502). Either party may request reconsideration. A taxpayer who loses can pay the tax and sue for refund in superior court for de novo review (Government Code section 15677).

The transfer statute, Government Code section 15672(a), gives OTA "all of the duties, powers, and responsibilities of the [Board] necessary or appropriate to conduct appeals hearings."

The Administrative Procedure Act at Government Code section 11342.2 says: "Whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute."

Yamaha Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1 sets the deference framework California courts apply to agency regulations. Deference depends on factors including the agency's expertise, the regulation's longstanding application, and the formality of the regulatory process. Deference is not absolute; courts (and adjudicators) can set aside regulations that conflict with statute.

The Board of Equalization's pre-2017 practice was extensive: from 1942 (Rockhold) through 2011 (Mid-State Bancshares), the Board entertained statutory challenges to FTB and Board regulations in appeals. Save Mart Supermarkets (2002) and Standard Oil Company (1983) are cases where the Board set aside an FTB regulation as inconsistent with statute. Safeway (2005) is the Board's clearest articulation of the underlying authority: "The duty to hear and determine franchise tax appeals implies the duty to apply the appropriate law to the facts."

Common questions

Why did OTA propose to close off regulation challenges in 2023?
The opinion describes the proposed regulatory amendment but doesn't explain OTA's specific motivation. OTA later withdrew it after public comments arguing it conflicted with governing law and submitted this opinion request to clarify the authority question.

Does this opinion mean I can challenge any FTB or CDTFA regulation in any OTA appeal?
You can raise as-applied statutory challenges in any appeal where a regulation affects the tax owed. The challenge has to be tied to the regulation's effect on your specific tax liability; OTA isn't a forum for facial challenges that don't matter to your case.

What does "appropriate deference" mean in practice?
It means OTA applies the Yamaha framework: weigh the agency's interpretive expertise, the formality of the rulemaking, the duration and consistency of the regulation's application, and the comparative skill of the agency and the panel. A long-standing regulation that closely tracks statute and was promulgated through full APA rulemaking gets substantial deference. A regulation that reads an additional element into the statute, or that was adopted recently with minimal explanation, gets less.

If OTA decides not to apply a regulation, does that ruling become precedent for other taxpayers?
Only if OTA designates the opinion as precedential under 5 CCR section 30501-30502. Even precedential opinions bind future OTA panels but not the courts on judicial review.

Can I rely on a past Board of Equalization decision setting aside a regulation?
Yes, but only as persuasive authority. The Board's adjudicative decisions weren't strictly binding on later Board panels and aren't strictly binding on OTA. They are good authority because OTA inherits the Board's adjudicative tradition, and the AG opinion explicitly endorses the Board's analytical framework.

Does OTA have to hear my regulation challenge if I raise it?
The panel must consider arguments relevant to the appeal. A statutory-conflict challenge to a regulation that determines your tax liability is a legitimate issue. The panel can decide whether the challenge has merit, but it can't refuse to hear it on jurisdictional grounds.

What if the regulation has already been upheld by an appellate court?
Then the panel is bound by the appellate decision and cannot set aside the regulation. The Board's old jurisdictional rules expressly excluded constitutional challenges to FTB regulations unless an appellate court had already invalidated the regulation; the AG opinion preserves a similar deference structure for as-applied challenges.

Does the rule apply to property tax disputes?
The Board still administers property tax under California Constitution article XIII, section 17. OTA does not handle property tax appeals; those go through county assessment appeals boards and superior court. This opinion is about CDTFA and FTB regulations adjudicated in OTA.

Can OTA's decision be appealed?
A taxpayer who loses can pay the disputed tax and sue for refund in superior court for de novo review. The agency does not have a right of appeal from OTA decisions in the same way; the agency's recourse is rulemaking or seeking legislative change.

Citations

• Government Code section 15672(a) (transfer of Board adjudicative authority to OTA)
• Government Code section 11342.2 (regulation validity)
• Government Code section 11500 et seq. (Administrative Procedure Act adjudication)
• Government Code section 15670 (OTA establishment, panel composition, ethics)
• Government Code section 15677 (de novo superior court review)
• 5 CCR section 30501-30502 (precedential opinions)
• Yamaha Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1 (deference framework)
• In the Matter of the Appeal of: Safeway, Inc. (Bd. Eq. 2005) 2005 WL 3530181 (authority articulated)
• In the Matter of the Appeal of Save Mart Supermarkets & Subsidiary (Bd. Eq. 2002) 2002 WL 245682 (regulation set aside as inconsistent with statute)
• Stats. 2017, ch. 16 (AB 102 reorganization)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/23-701_0.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
ROB BONTA
Attorney General

OPINION
of
ROB BONTA
Attorney General
KARIM J. KENTFIELD
Deputy Attorney General

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No. 23-701
July 31, 2025

The HONORABLE MYRIAM BOUAZIZ, DIRECTOR OF THE OFFICE OF
TAX APPEALS, has requested an opinion on a question relating to the Office’s
authority.
QUESTION PRESENTED AND CONCLUSION
When adjudicating a taxpayer appeal, does the Office of Tax Appeals have the
authority to issue a written opinion in which it concludes that applying a particular tax
regulation—promulgated by a different state agency and approved by the Office of
Administrative Law—to that taxpayer’s circumstances would conflict with governing
statutes and to decline to apply the regulation to the taxpayer on that basis?
When adjudicating a taxpayer appeal, the Office of Tax Appeals has the authority
to issue a written opinion in which it concludes that applying a particular tax regulation to
that taxpayer’s circumstances would conflict with governing statutes and to decline to
apply the regulation to the taxpayer on that basis. In making this determination, the
Office must afford appropriate deference to the agency that promulgated the regulation.
The Office has no authority to remove a regulation from the California Code of
Regulations, or to enforce its view of a regulation’s validity or applicability outside the
context of adjudicating a particular taxpayer appeal.

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BACKGROUND
This opinion concerns several administrative bodies that collectively administer
numerous state taxes and fees. The California Constitution establishes the Board of
Equalization (Board) as a state administrative agency. 1 The Board consists of five voting
members, including the state Controller and four members elected by district. 2 The
Constitution and state statutes require the Board to administer certain tax programs,
including taxes on property, insurers, and alcoholic beverages. 3
Relevant here, the Board was previously charged with several additional statutory
duties. For decades, the Board administered dozens of business taxes and fees, including
the State’s sales and use taxes. 4 The Board also acted as an administrative appeals body,
hearing taxpayer challenges to its tax and fee assessments. Taxpayers who disagreed
with a Board assessment could receive two levels of review: first before the Board’s
Appeals Division, and then before the Board itself. 5
The Board also previously heard appeals concerning taxes administered by a
second administrative body, the Franchise Tax Board (FTB). Located within the
Government Operations Agency, FTB administers the State’s franchise and income
taxes. 6 Taxpayers who disagreed with an FTB tax assessment could appeal to the Board
for an independent adjudication of the dispute. In such appeals, the Board allowed
taxpayers to argue that FTB regulations that affected their tax liability were inconsistent

Cal. Const., art. XIII, § 17; see Gov. Code, § 15600, subd. (a); Cal. State Board of
Equalization, About BOE, https://www.boe.ca.gov/info/about.htm (as of July 30, 2025);
93 Ops.Cal.Atty.Gen. 70, 76 (2010).
1

2

Cal. Const., art. XIII, § 17.

See Cal. Const., art. XIII, §§ 11, 18-19, 28; id., art. XX, § 22; see also Gov. Code,
§ 15600, subd. (b).
3

See Cal. State Board of Equalization, History & Milestones of the State Board of
Equalization, https://www.boe.ca.gov/info/milestones.htm (as of July 30, 2025);
108 Ops.Cal.Atty.Gen. 12, 14 (2025).
4

See former Cal. Code Regs., tit. 18, § 5260 et seq. All references to the Board’s former
regulations are to the regulations in effect in 2017 when the Legislature established the
Office of Tax Appeals.

5

See Gov. Code, § 15700 et seq.; Rev. & Tax Code, § 18401 et seq. The Government
Operations Agency is an executive agency that “oversees and supports the work of 13
departments, boards, and offices.” (Cal. Government Operations Agency, About the
California Government Operations Agency, https://www.govops.ca.gov/about-thecalifornia-government-operations-agency/ (as of July 30, 2025).)
6

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with governing statutes. If the Board agreed, it would apply the statute, and not the
regulation, in determining the taxpayer’s liability. 7
In 2017, the Legislature expressed concern that the Board’s “operational culture”
had led to “inappropriate interventions by board members in administrative and appealrelated activities.” 8 In the Legislature’s view, these problems had resulted in
“inconsistencies in operations,” “activities contrary to state law,” and “significant
errors.” 9 To “restore the public’s trust,” the Legislature transferred most of the Board’s
statutory responsibilities to two new state administrative bodies. 10
First, the Legislature created the California Department of Tax and Fee
Administration (CDTFA). 11 The Legislature transferred to CDTFA the Board’s statutory
duty to administer certain business taxes and fees, including the sales and use taxes. 12
Like the Board before it, CDTFA is authorized to enact regulations implementing these
tax and fee programs. 13 The Board remains responsible for the taxes that it is
constitutionally obligated to administer. 14
Second, the Legislature established the Office of Tax Appeals (OTA), an
“independent and impartial appeals body” located within the executive branch. 15 The
Legislature transferred to OTA all of the Board’s statutory “duties, powers, and
responsibilities . . . necessary or appropriate to conduct appeals hearings.” 16 A taxpayer
See, e.g., In the Matter of the Appeal of Save Mart Supermarkets & Subsidiary (Bd. Eq.
2002) 2002 WL 245682, pp. 2-4 (agreeing with taxpayer that FTB regulation was
inconsistent with the statute and declining to apply it in determining taxpayer’s liability).

7

8

Stats. 2017, ch. 16 (AB 102) § 2, subds. (d), (e).

9

Id., subds. (e), (i).

10

Id., subd. (j).

Gov. Code, § 15570, subd. (a) (creating CDTFA within the Government Operations
Agency).
11

See Gov. Code, § 15570.22; Rev. & Tax Code, § 20, subd. (a); see also Cal.
Department of Tax and Fee Administration, About CDTFA,
https://www.cdtfa.ca.gov/about.htm (as of July 30, 2025).
12

Gov. Code, § 15570.40, subd. (a); see, e.g., Rev. & Tax Code, §§ 7051, 8251, 30451,
38701; see id., § 20, subd. (a).
13

14

See Gov. Code, § 15600, subd. (b).

Office of Tax Appeals, https://ota.ca.gov/about/ (as of July 30, 2025); see Gov. Code,
§ 15670.
15

Gov. Code, § 15672, subd. (a); see id., § 15674; see also Rev. & Tax Code, § 20, subd.
(b) (defining “board” “with respect to an appeal” as the Office of Tax Appeals).
16

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who disagrees with CDTFA’s assessment of taxes or fees can appeal to OTA and receive
an independent adjudication of the dispute. 17 A taxpayer who disagrees with an FTB
assessment can likewise challenge its determination in an OTA appeal. 18
In creating OTA, the Legislature sought to establish “an independent, objective”
appeals process before adjudicators with “a sole focus on tax issues.” 19 Taxpayer appeals
are generally decided by a three-member panel consisting of persons possessing
“knowledge and experience” concerning state and federal tax and fee laws. 20 Panel
members must agree to abide by “ethics standards,” “including rules governing conflicts
of interest and ex parte communication.” 21 And panels must operate independently,
deciding appeals free from involvement of the OTA Director. 22
The OTA appeals process allows panels to carefully adjudicate taxpayer disputes.
Both the taxpayer and the adverse tax agency—CDTFA or FTB—may file briefs
explaining their view of the relevant law and facts. 23 At the panel’s discretion, other
parties may file amicus briefs as well. 24 After briefing is complete, taxpayers are entitled
to a hearing, which the OTA panel must generally conduct in accordance with the
Administrative Procedure Act. 25 Taxpayers may be represented by an attorney or a nonattorney, such as an accountant. 26 After considering the issues, the OTA panel must issue
a written opinion explaining its decision. 27 OTA opinions, which can be deemed
precedential, may include “findings of fact, a statement of the legal issue(s) presented,
applicable law, analysis,” and the panel’s holding. 28 Panel members may also issue

17

See Cal. Code Regs., tit. 18, § 30103, subd. (b).

18

Id., subd. (a).

19

Stats. 2017, ch. 16 (AB 102) § 2, subd. (b).

Gov. Code, § 15670, subd. (c). Taxpayers with smaller amounts in dispute may choose
to have their appeals heard by a single adjudicator. (See id., § 15676.2; Cal. Code Regs.,
tit. 18, §§ 30209.05-30209.1.)
20

21

Gov. Code, § 15670, subds. (c)(1), (d).

22

Gov. Code, § 15670, subd. (b)(2).

23

See Cal. Code Regs., tit. 18, §§ 30301-30316.

24

See Cal. Code Regs., tit. 18, § 30302, subd. (g).

25

See Gov. Code, § 15674, subd. (a)(3); Cal. Code Regs., tit. 18, § 30216.

26

Gov. Code, § 15676; Cal. Code Regs., tit. 18, § 30211, subd. (a).

27

Gov. Code, §§ 15674, subd. (a)(2), 15675; Cal. Code Regs., tit. 18, § 30501, subd. (a).

28

Cal. Code Regs., tit. 18, § 30501, subd. (b); see id., § 30502.
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concurring or dissenting opinions, and either party can ask the panel to reconsider. 29 A
taxpayer who disagrees with the final decision may seek de novo review in superior court
by paying the disputed tax, then suing for a refund. 30
OTA is authorized to issue regulations governing the appeals process. 31 In April
2023, OTA proposed a regulatory amendment providing that taxpayers could not
challenge the validity of a tax regulation in an OTA appeal, even if the regulation
affected the amount of tax owed (unless an appellate court had already declared the
regulation invalid). 32 The proposal would have reversed the Board’s prior practice of
allowing taxpayers to challenge the application of a regulation to their particular
circumstances. OTA ultimately withdrew the proposal after receiving public comments
arguing that it conflicted with governing law.
OTA then submitted this opinion request, asking whether its panels have the
authority to hear challenges to regulations promulgated by FTB or CDTFA. 33 The
request explains why, in OTA’s view, its panels do not have that authority. FTB and
CDTFA have taken the same position in litigation before OTA panels. 34 In contrast, we
received public comments arguing that OTA panels can hear challenges to tax
regulations.

29

Cal. Code Regs., tit. 18, §§ 30501, subd. (d), 30601-30608.

See Gov. Code, § 15677 (de novo review in taxpayer suit); see, e.g., Rev. & Tax Code,
§§ 19382, 19385 (refund suit against FTB); id., § 6933 (refund suit against CDTFA for
sales or use tax).
30

31

See Gov. Code, §§ 15679, 15679.5.

See Prop. Cal. Code Regs., tit. 18, § 30104, subd. (d), available at OTA’s Rules for Tax
Appeals, OAL File No. 2023-0526-02FP, Documents for First Notice of Proposed
Rulemaking, https://ota.ca.gov/regulations/ (as of July 30, 2025).

32

All references to CDTFA regulations include regulations originally issued by the Board
in areas that CDTFA now administers, such as the sales and use taxes.
33

To date, OTA panels have concluded that they cannot hear challenges to tax
regulations, over a dissent in one case. (Compare In the Matter of the Appeal of: Bed
Bath & Beyond Inc. (OTA 2022) No. 18011340, 2022 WL 1479162, p. 4 [“[OTA] lacks
the authority to invalidate FTB’s regulations”], with id., at p. 10 (H. Le, dis. and conc.,
in part) [“When a regulation is inconsistent with controlling law (existing statutes, court
decisions, or other law provisions), I believe OTA must follow controlling law”]; see
also, e.g., In the Matter of the Appeal of: Janus Capital Group, Inc. and Subsidiaries
(OTA 2023) No. 20096605, 2023 WL 5934944, pp. 2-3 [OTA lacked authority to hear
challenge to FTB regulation]; In the Matter of the Appeal of: Alfredo J. Talavera (OTA
2020) No. 18011825, 2020 WL 3629619, p. *4 [same for CDTFA regulation].)
34

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ANALYSIS
We conclude that, in adjudicating taxpayer appeals, an OTA panel can evaluate
whether applying a tax regulation to the taxpayer’s circumstances would conflict with
applicable statutes. If so, then the panel can decline to apply the regulation in
determining the taxpayer’s liability. We first explain why OTA’s governing statute
confers such authority. We then discuss the requestor’s concerns that allowing panels to
adjudicate challenges to regulations would conflict with the California Administrative
Procedure Act (APA) and the state Constitution.
The Legislature Authorized OTA Panels to Adjudicate Challenges to Tax
Regulations.
“[A]dministrative agencies have only such powers as have been conferred on
them, expressly or by implication, by constitution or statute.” 35 Here, the Legislature
generally conferred on OTA panels all adjudicative authority previously held by the
Board of Equalization. 36 We must therefore determine whether, at the time of OTA’s
creation, the Board was authorized to consider whether a tax regulation may lawfully be
applied in particular circumstances.
The Board of Equalization was authorized to hear challenges to tax regulations.
As described above, the Board was previously authorized to hear administrative
appeals concerning both the taxes it assessed, and the taxes assessed by the Franchise Tax
Board. Both the Board and FTB were authorized to enact regulations implementing the
taxes each agency administered. In some cases, the Board or FTB would have relied on a
regulation to determine the tax owed. A taxpayer who believed that applying the
regulation to their circumstances would conflict with governing statutes sometimes
sought to challenge the regulation during an administrative appeal before the Board. We
conclude that, in hearing those appeals, the Board was authorized to adjudicate such
challenges to both its own regulations and regulations promulgated by FTB. That
conclusion is supported by the Board’s jurisdictional regulations, its longstanding
administrative practice, the California Administrative Procedure Act, and California
Supreme Court precedent.
To begin with, we read the Board’s regulations defining its appeals jurisdiction as
authorizing statutory challenges to tax regulations. As to the taxes and fees the Board
itself administered, the regulations placed no limits on the issues that could be raised
35

Ferdig v. State Pers. Bd. (1969) 71 Cal.2d 96, 103.

Gov. Code, § 15672, subd. (a) (vesting OTA with “all of the duties, powers, and
responsibilities of the [Board] necessary or appropriate to conduct appeals hearings” for
the taxes and fees at issue here).
36

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during an appeal. 37 The regulations stated, for example, that a taxpayer could “present
oral arguments regarding issues of fact and law relevant to the taxpayer’s appeal.” 38
Where a Board regulation was relevant to the taxpayer’s assessed liability, adjudicating a
statutory challenge to the regulation’s validity as applied to the taxpayer was therefore
within the scope of the Board’s authority.
As to FTB assessments, the Board’s “jurisdiction [was] limited to determining the
correct amount owed by, or due to, the [taxpayer] for the year” at issue. 39 If an FTB
regulation was determinative of a taxpayer’s assessed liability, adjudicating a statutory
challenge to the regulation’s application to the taxpayer was thus within the “Board’s
jurisdiction” as it would have “determin[ed] the correct amount owed by, or due to, the”
taxpayer. 40 Moreover, while taxpayers were specifically prohibited from challenging
FTB “regulation[s] . . . under the Federal or California Constitutions,” there was no
similar limitation as to challenges under the governing statute. 41 The fact that the
jurisdictional rules expressly contemplated challenges to FTB regulations—but only
prohibited those made on constitutional grounds—strongly suggests that the Board was
authorized to hear challenges made on statutory grounds. 42
Consistent with its jurisdictional regulations, the Board itself determined that it
could adjudicate claims by taxpayers that applying a tax regulation to their circumstances
would conflict with a governing statute. For more than half a century, the Board
entertained such claims across numerous appeals. 43 In most cases, it upheld the validity
See former Cal. Code Regs., tit. 18, § 5510 et seq.; e.g., id., § 5511, subd. (a) (defining
“appeal” without limiting available issues); id., § 5523.4 (same for briefing rules); id.,
§ 5551, subds. (a), (b) (same for rules governing how Board would “decide an appeal”).
37

38

Former Cal. Code Regs., tit. 18, § 5511, subd. (e).

39

Former Cal. Code Regs., tit. 18, § 5412, subd. (b).

40

Ibid.

Former Cal. Code Regs., tit. 18, § 5412, subd. (b), (b)(1) (“The Board has determined
that it does not have jurisdiction to consider . . . [w]hether a California . . . regulation is
invalid or unenforceable under the Federal or California Constitutions, unless a federal or
California appellate court has already made such a determination”).
41

See generally In re J.W. (2002) 29 Cal.4th 200, 209 (under expressio unius principle,
“the expression of one thing in a statute ordinarily implies the exclusion of other things”).
42

See, e.g., In the Matter of the Appeal of Katherine M. Rockhold (Bd. Eq. 1942) 1942
WL 392, pp. 2-4; In the Matter of the Appeal of Elizabeth Brown McCombie (Bd. Eq.
1951) 1951 WL 382; In the Matter of the Appeals of George French, Jr., and Mary E.
French (Bd. Eq. 1958) 1958 WL 1284, p. 2; In the Matter of the Appeal of Frank P.
Chiappara (Bd. Eq. 1979) 1979 WL 4174, pp. 1-*2; In the Matter of the Appeal of
(continued…)
43

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of the challenged regulation. But on at least two occasions, the Board concluded that
applying an FTB regulation to the taxpayer’s circumstances would conflict with a
statute—for example, because the regulation “alter[ed] and enlarge[d] on the words of the
statute”—and therefore declined to apply the regulation in adjudicating the appeal. 44
The Board explained the source of that authority in a 2005 decision, In the Matter
of the Appeal of: Safeway, Inc. 45 “The duty to hear and determine franchise tax appeals,”
it stated, “implies the duty to apply the appropriate law to the facts.” 46 That required the
Board to determine what law applied to the taxpayer’s circumstances by “interpret[ing]
statutes and [tax] regulations.” 47 And under Government Code section 11342.2, part of
the Administrative Procedure Act, a regulation is not “valid or effective” if it is “in
conflict with the [governing] statute.” 48 Accordingly, to determine the correct law to
apply to a taxpayer’s case, the Board concluded that it was necessary to adjudicate the
statutory validity of any relevant regulations. In making that determination, the Board
afforded appropriate deference to the view of the promulgating agency, just as a court
would do on judicial review. 49 But if the Board concluded that a regulation could not be
reconciled with the statute in the given circumstances, then it applied the statute and not
the regulation in adjudicating the appeal. 50
Willamette Industries, Inc. (Bd. Eq. 1987) 1987 WL 50176, pp. 2-3; In the Matter of
the Appeal of Northridge Fashion Center, Inc. (Bd. Eq. 1989) 1989 WL 132763, p. 2; In
the Matter of the Appeal of: Mid-State Bancshares (Bd. Eq. 2011) 2011 WL 2440648.
In the Matter of the Appeal of Save Mart Supermarkets & Subsidiary, supra, 2002 WL
245682, at p. 3; see also In the Matter of the Appeal of Standard Oil Company of
California (Bd. Eq. 1983) 1983 WL 15454, pp. 18-19.
44

45

In the Matter of the Appeal of: Safeway, Inc. (Bd. Eq. 2005) 2005 WL 3530181, p. *5.

46

Ibid.

47

Ibid.

Ibid., quoting Gov. Code, § 11342.2 (“Whenever by the express or implied terms of
any statute a state agency has authority to adopt regulations to implement, interpret, make
specific or otherwise carry out the provisions of the statute, no regulation adopted is valid
or effective unless consistent and not in conflict with the statute and reasonably necessary
to effectuate the purpose of the statute”).
48

See, e.g., In the Matter of the Appeal of Save Mart Supermarkets & Subsidiary, supra,
2002 WL 245682, at p. 3 (applying the deference framework articulated in Yamaha
Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1); In the Matter of
the Appeal of: Mid-State Bancshares, supra, 2011 WL 2440648, at p. 5 (same).
49

See, e.g., In the Matter of the Appeal of Save Mart Supermarkets & Subsidiary, supra,
2002 WL 245682, at p. *4.
50

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The Board’s analysis of section 11342.2 is consistent with California Supreme
Court precedent holding that agencies can adjudicate challenges to regulations in an
administrative appeal. In Woods v. Superior Court, the Department of Social Services
had applied its regulations to deny an application for welfare benefits. 51 The Supreme
Court held that the disappointed applicants could “contest the validity of a regulation
which mandates the denial of [their] application both in the [administrative appeal] and in
the subsequent judicial review.” 52 The agency’s decision denying benefits “places in
issue the validity of the regulations pursuant to which relief was denied.” 53 And the
regulations could be challenged during the administrative appeal because the governing
statute “impose[d] no limitation, factual or legal, upon the issues which may be raised.” 54
The Court rejected the agency’s argument that allowing “an attack on the validity
of [its] regulations” in an administrative appeal would be futile because “an
administrative agency is compelled to enforce its own regulations.” 55 To the contrary,
the Court explained, both “precedent and common sense” confirmed that “an invalid
regulation should be vulnerable to attack at the administrative level.” 56 The Court
emphasized that under Government Code section 11342.2—the APA provision relied on
by the Board in Appeal of Safeway, described above—“no regulation . . . is valid or
effective unless consistent and not in conflict with the statute.” 57 Accordingly,
“administrative regulations which exceed the scope of the enabling statute are invalid and
have no force or life.” 58
On a practical level, the Court recognized that prohibiting agencies from hearing
challenges to regulations would “require the invocation of a judicial remedy in all such
cases.” 59 That result would be “ill-advised,” as the “courts should not be burdened with
matters which can be adequately resolved in administrative fori.” 60 Allowing agencies to
51

Woods v. Superior Ct. (1981) 28 Cal.3d 668, 671-672.

52

Id. at p. 677.

53

Id. at p. 676.

54

Id. at p. 674.

55

Id. at p. 680.

56

Ibid., italics in original.

57

Gov. Code, § 11342.2.

Woods v. Superior Ct., supra, 28 Cal.3d at p. 680, citing, e.g., Bright v. Los Angeles
Unified Sch. Dist. (1976) 18 Cal.3d 450, 459-464; Cooper v. Swoap (1974) 11 Cal.3d
856, 864-865; California Welfare Rights Organization v. Brian (1974) 11 Cal.3d 237,
239, 242-243; In re Jordan (1972) 7 Cal.3d 930, 939.
58

59

Woods v. Superior Ct., supra, 28 Cal.3d at p. 680.

60

Ibid.
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consider such challenges, the Court explained, “serves the twin goals of avoiding delay
and unnecessary expense in vindication of legal rights.” 61 And even where the validity of
a regulation must ultimately “be judicially resolved, the task of a reviewing court is
simplified by a narrowing and clarification of the issues in an administrative hearing.” 62
The Court therefore concluded that “[i]nvalid regulations need not be applied or
enforced” by the agency in its administrative hearings. 63 Applying Woods, the Court of
Appeal has similarly held that the California Air Resources Board can adjudicate
challenges to its regulations in an administrative hearing. 64
We see no persuasive basis to distinguish these authorities here. As in Woods, an
assessment of taxes by the Board or FTB would have “place[d] in issue the validity of the
regulations pursuant to which” tax liability was imposed. 65 And as in Woods, taxpayers
who disagreed with the application of such a regulation to their circumstances could
challenge it in an administrative appeal. To be sure, nothing in the regulations governing
such appeals expressly authorized challenges to tax regulations. But the same was true in
Woods. It was enough that the agency could hear challenges to its adjudicative decisions,
and that there was no relevant “limitation, factual or legal, upon the issues which may be
raised.” 66 Likewise, here, the regulations governing Board appeals did not preclude
statutory challenges to the application of tax regulations. 67
The requestor argues that Woods is distinguishable because the agency that
promulgated the regulation there also conducted the administrative hearing. But as to
appeals concerning the Board’s own tax and fee assessments, the relevant circumstances
were identical. And we see no reason why the Woods analysis would not also have
applied to appeals from FTB assessments. The Court reasoned that a regulation “in
conflict with [a] statute” is “invalid” under Government Code section 11342.2 and
therefore “need not be applied” in an administrative appeal. 68 That reasoning applies
61

Id. at p. 681.

62

Ibid.

Id. at p. 682; see also Green v. Obledo (1981) 29 Cal.3d 126, 143, fn. 12 (reiterating
Woods’ holding).
63

64

See Harris Transportation Co. v. Air Res. Bd. (1995) 32 Cal.App.4th 1472, 1479.

65

Woods v. Superior Ct., supra, 28 Cal.3d at p. 676.

Woods v. Superior Ct., supra, 28 Cal.3d at p. 674; see also, e.g., Harris Transportation
Co. v. Air Res. Bd., supra, 32 Cal.App.4th at p. 1477.
66

67

See ante, fns. 37-42.

Woods v. Superior Ct., supra, 28 Cal.3d at pp. 680-682, citing Gov. Code, § 11342.2
(regulations that are “in conflict” with the enabling statute are not “valid or effective”);
(continued…)
68

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equally whether the agency adjudicating the appeal promulgated the challenged
regulation or not. The same is true of the Court’s analysis of “practical effect[s]”:
allowing challenges to regulations at the administrative stage can “avoid[] delay and
unnecessary expense,” while aiding judicial review by “narrowing and clarif[ying]” the
issues. 69 Indeed, the latter concern is particularly salient in the highly technical tax
context, where the Court has emphasized the importance of administrative exhaustion to
“obtain the benefit of the [agency’s] expertise, permit it to correct mistakes, and save
judicial resources.” 70 As in Woods, adjudicating challenges to tax regulations fell
squarely within the Board’s area of expertise as it required construing the same statutes
and regulations the Board regularly administered. 71
Finally, Newco Leasing, Inc. v. State Board of Equalization, cited by the requestor,
is not relevant here. In Newco, the Court of Appeal stated the background principle that
the Board, when performing tax assessments, must reasonably interpret tax statutes and
“be faithful to its own announced regulations.” 72 But Newco did not involve a challenge
to a regulation’s validity, so it does not speak to the issue here. Rather, the Supreme
Court’s holding in Woods—that “[i]nvalid regulations need not be applied or enforced” at
the administrative stage—is controlling. 73
In transferring the Board’s duties to OTA, the Legislature did not eliminate the
authority to hear statutory challenges to tax regulations.
In 2017, the Legislature transferred the Board’s statutory authority to hear
taxpayer appeals to OTA. We see no evidence that, in doing so, the Legislature intended
to eliminate the authority to consider challenges to the application of tax regulations. To
the contrary, for the taxes and fees at issue here, Government Code section 15672
provides that OTA “is the successor to, and is vested with, all of the duties, powers, and
responsibilities of the [Board] necessary or appropriate to conduct appeals hearings.” 74
The Legislature also mandated that the Board’s jurisdictional regulations would
see also Verdugo Hills Hosp., Inc. v. Dep’t of Health (1979) 88 Cal.App.3d 957, 963
(applying predecessor to § 11342.2 and concluding that an agency did “not proceed[] in
the manner required by law” where it “[p]roceed[ed] pursuant to an invalid regulation”).
69

Woods v. Superior Ct., supra, 28 Cal.3d at pp. 680, 681.

70

Loeffler v. Target Corp. (2014) 58 Cal.4th 1081, 1127.

71

See Burlington N. & Santa Fe Ry. Co. v. PUC (2003) 112 Cal.App.4th 881, 889.

72

Newco Leasing, Inc. v. State Bd. of Equalization (1983) 143 Cal.App.3d 120, 124.

Woods v. Superior Ct., supra, 28 Cal.3d at p. 682; see Harris Transportation Co. v. Air
Res. Bd., supra, 32 Cal.App.4th at p. 1479 (“a challenge to the legality of . . . regulations
is cognizable” in an administrative hearing).

73

74

Gov. Code, § 15672, subd. (a), italics added; see also id., § 15674, subd. (a)(1).
11

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“continue in force and apply to all appeals hearings.” 75 As explained above, we read
those regulations to authorize statutory challenges to tax regulations. And the Board
itself had held that it could adjudicate statutory challenges to tax regulations and had
adjudicated such challenges for decades. 76 Yet the Legislature did nothing to displace or
repudiate any Board decisions. 77
In fact, the evidence suggests that the Legislature sought to reaffirm the authority
to adjudicate challenges to tax regulations. Although the Legislature left the Board’s
jurisdictional regulations in effect, it authorized OTA to “amend, repeal, or add to” those
regulations “as necessary or appropriate to govern” OTA appeals. 78 But the Legislature
required that any such amendment be “consistent with” a 2006 Model Act governing
administrative tax tribunals. 79 And that Model Act allows taxpayers to challenge tax
regulations during administrative appeals. 80 As a result, an amendment to OTA’s
Gov. Code, § 15679.5, subd. (a) (maintaining in effect “the regulations contained in
Division 2.1 of Title 18 of the California Code of Regulations,” unless “in conflict with
this part”); see former Cal. Code Regs., tit. 18, § 5510 et seq. (rules for administrative
appeals to the Board, contained in Chapter 5 of Division 2.1); id., § 5410 et seq. (rules
applicable to FTB appeals to the Board, contained in Chapter 4 of Division 2.1); e.g., id.,
§ 5412 (regulation discussed above defining Board’s jurisdiction in FTB appeals).
75

76

See ante, fns. 43-50.

Accord Cal. Code Regs., tit. 18, § 30504 (precedential Board opinions “may be cited as
precedential authority to OTA unless OTA removes . . . the precedential status of that
opinion”); cf. California Renters Legal Advoc. & Educ. Fund v. City of San Mateo (2021)
68 Cal.App.5th 820, 843 (“Lawmakers are presumed to be aware of long-standing
administrative practice and, thus, the failure to substantially modify a provision is a
strong indication the administrative practice was consistent with underlying legislative
intent,” internal quotation marks, alterations, and ellipses omitted).
77

78

Gov. Code, § 15679.5, subd. (b)(1).

Id., subd. (b)(3) (“To the extent applicable and not in conflict with this part, regulatory
actions adopted to carry out this subdivision shall be consistent with the Model State
Administrative Tax Tribunal Act dated August 2006 adopted by the American Bar
Association”). The Model Act provides a legislative template for States to “establish[] an
independent tax tribunal within the executive branch of government.” (Model State
Administrative Tax Tribunal Act (Aug. 2006) § 1,
https://www.americanbar.org/content/dam/aba/administrative/taxation/policy/abaofficial-modelact-reported-8706.pdf.)
79

The Model Act authorizes the appeals tribunal to adjudicate “questions of law and fact
arising under the tax laws of this State.” (Model State Administrative Tax Tribunal Act,
supra, § 7, subd. (a).) The validity of tax regulations would fall within this broad grant of
(continued…)
80

12

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jurisdictional regulations that prohibited challenges to tax regulations would likely be
invalid as not “consistent with” the Model Act. 81 The Legislature’s incorporation of the
Model Act is further evidence of its intent for OTA panels, like the Board before them, to
hear statutory challenges to tax regulations.
For these reasons, if an OTA panel determines that applying a tax regulation to the
taxpayer’s circumstances would “conflict with” governing statutes, it may decline to
enforce the regulation against that taxpayer. 82 In making that determination, panels must
afford appropriate deference to the view of the agency that promulgated the regulation,
just as a court would do on judicial review. 83 Panels have no authority to apply their
view of a regulation’s validity outside the context of adjudicating a taxpayer appeal.
The APA Does Not Bar OTA Panels from Adjudicating Challenges to Regulations.
Notwithstanding the above authorities, the requestor argues that if OTA panels
adjudicate challenges to tax regulations, it would conflict with the California
Administrative Procedure Act. A 2003 opinion of the Legislative Counsel of California
raised similar concerns as to the Board’s authority. 84 We see no conflict with the APA.
The APA’s requirements for agency rulemaking do not apply here.
The APA regulates two modes of agency action. First, it governs the quasilegislative process by which agencies promulgate regulations. 85 The statute requires an
agency to “give the public notice” of a regulatory proposal and “an opportunity to
comment.” 86 Second, the APA governs the quasi-judicial process by which agencies
authority. Indeed, the Act even authorizes the tribunal to “decide questions regarding . . .
the constitutionality of regulations.” (Id., § 7, subd. (e), italics added.)
81

See Gov. Code, § 15679.5, subd. (b)(3).

82

Gov. Code, § 11342.2.

See Yamaha Corp. of America v. State Board of Equalization, supra, 19 Cal.4th at
pp. 6-15; accord, e.g., In the Matter of the Appeal of Save Mart Supermarkets &
Subsidiary, supra, 2002 WL 245682, at p. *3 (Board decision applying Yamaha
framework to evaluate challenge to FTB regulation).
83

See In the Matter of the Appeal of: Safeway, Inc., supra, 2005 WL 3530181, at p. *3 &
fn. 3 (describing Legislative Counsel opinion and disagreeing with its analysis).
84

See Tidewater Marine W., Inc. v. Bradshaw (1996) 14 Cal.4th 557, 568; see Gov.
Code, § 11342.600 (defining “regulation” to include “every rule, regulation, order, or
standard of general application,” italics added).
85

86

Tidewater Marine W., Inc. v. Bradshaw, supra, 14 Cal.4th at p. 568; see Gov. Code,
(continued…)
13

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adjudicate the obligations of particular parties. 87 OTA panels engage in this type of
decision making—finding facts specific to the taxpayer, determining the relevant law,
and applying the law to the facts. 88 OTA panels are subject to the APA’s rules governing
agency adjudications; in addition, they are expressly exempted from the APA’s
rulemaking procedures, even if an OTA opinion is designated as precedential. 89
Because OTA panels engage in quasi-judicial decision making, the requestor
argues that they cannot adjudicate challenges to tax regulations. In the requestor’s view,
if an OTA panel determines that a regulation is invalid, it would effectively repeal the
regulation. And repealing a regulation is a quasi-legislative action subject to the APA’s
rulemaking requirements. 90 Given that OTA panels do not follow those requirements, the
requestor concludes that they cannot hear challenges to regulations.
But the California Supreme Court has rejected the premise of this argument. In
Woods, the Court held that an agency’s determination that a regulation is invalid during
an administrative appeal is a “quasi-adjudicative” action—not a “quasi-legislative” one. 91
As a result, the agency could determine a regulation’s validity, even though the appeal
did not follow the APA’s rulemaking requirements. 92 Likewise, here, OTA decisions
remain “adjudicatory in nature” even if they determine “the validity of [tax]
regulations.” 93 After all, if a court holds that a tax regulation may not lawfully be applied
§ 11340 et seq.; Asimow et al., Cal. Practice Guide: Administrative Law (The Rutter
Group 2024) ¶ 23:1 et seq.
87

See Asimow et al., Cal. Practice Guide: Administrative Law, supra, ¶ 4:1 et seq.

See Gov. Code, § 11405.50 (APA definition of an adjudicative decision as “an agency
action of specific application that determines a legal right, duty, privilege, immunity, or
other legal interest of a particular person,” italics added).
88

See Gov. Code, § 15674, subd. (a)(3); Cal. Code Regs., tit. 18, § 30216; Gov. Code,
§ 15679, subd. (b).
89

Gov. Code, § 11346, subd. (a) (APA rulemaking requirements apply to the “repeal of
administrative regulations” and “shall not be superseded or modified by any subsequent
legislation except to the extent that the legislation shall do so expressly”).
90

Woods v. Superior Ct., supra, 28 Cal.3d at p. 676; see ibid. (claims in such an appeal
“are predicated upon the existence of facts which are peculiar to” particular parties).
91

Id. at pp. 676-678. The Court evaluated the mode of agency decision making to
determine the appropriate method of judicial review. Given that the decision was
adjudicative, the Court held that it was reviewable by administrative mandamus—
typically used to review adjudicative agency decisions.
92

Id. at p. 676; see also Green v. Obledo, supra, 29 Cal.3d at p. 143, fn. 12 (regulations
can be challenged in an administrative hearing, which is adjudicatory in nature).
93

14

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to a litigant, it is clearly acting in a judicial capacity, not a legislative one. Where an
OTA panel makes an identical determination, it engages in adjudicative decision making
as well. The APA’s requirements for “quasi-legislative” rulemaking therefore do not
apply. 94
That conclusion is consistent with the legal effect of OTA opinions. Even if a
panel declines to apply a tax regulation in an individual appeal, it has no authority to
“repeal” the regulation, that is, remove it from the California Code of Regulations. 95 And
although an OTA opinion concerning a regulation’s application to a particular taxpayer
may have precedential effect in later OTA appeals, the same is true of many other OTA
decisions—for example, construing a statute or regulation. If an OTA decision interprets
an ambiguous regulation, for instance, that would not constitute an “amendment” for
purposes of the APA’s rulemaking requirements, even if the decision is deemed
precedential. Rather, as the Supreme Court has explained, agency “interpretations that
arise in the course of case-specific adjudication are not regulations, though they may be
persuasive as precedents in similar subsequent cases.” 96
The APA’s cause of action for declaratory relief does not affect the analysis.
Nor do we believe that allowing OTA panels to hear challenges to tax regulations
would circumvent the APA’s declaratory relief mechanism. Government Code section
11350(a) provides that “[a]ny interested person may obtain a judicial declaration as to the
validity of any regulation . . . by bringing an action for declaratory relief in the superior
court in accordance with the Code of Civil Procedure.” 97 But although the section
provides one path to challenge a regulation in court, it does not state that it is the only
method to resist the application of a regulation. As the Court of Appeal has explained,
the “purpose of section 11350 is not to limit the available remedies in challenging a

94

Gov. Code, § 11346, subd. (a).

See generally Gov. Code, § 11346 et seq. (detailed procedural requirements for an
agency to remove a regulation from the California Code of Regulations); cf. Pidgeon v.
Turner (Tex. 2017) 538 S.W.3d 73, 88, fn. 21 (where a court determines that a law is
invalid and declines to apply it to a particular dispute, “the law remains in place unless
and until the body that enacted it repeals it”).
95

Tidewater Marine W., Inc. v. Bradshaw, supra, 14 Cal.4th at p. 571; see also In the
Matter of the Appeal of: Safeway, Inc., supra, 2005 WL 3530181, at p. *5.
96

Gov. Code, § 11350, subd. (a); see Code Civ. Proc., § 1060 (authorizing an action for
declaratory relief in superior court); see also Asimow et al., Cal. Practice Guide:
Administrative Law, supra, ¶¶ 22:6, 13:375; Woods v. Superior Ct., supra, 28 Cal.3d at
p. 682; see, e.g., California Dep’t of Tax & Fee Admin. v. Superior Ct. (2020)
48 Cal.App.5th 922, 928 (discussing plaintiff’s standing to challenge regulation).
97

15

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regulation, but rather to permit any interested person . . . to test [a regulation’s] validity”
without first violating it. 98
In fact, there are multiple ways to challenge a regulation. To challenge an
agency’s quasi-legislative act of promulgating a regulation outside the context of a
specific dispute, a party can either seek a declaratory judgment or proceed by ordinary
mandamus. 99 To challenge a regulation in the context of an agency adjudication, a party
can often proceed by administrative mandamus, as the Supreme Court recognized in
Woods. 100 In the tax context, taxpayers who wish to challenge administrative
assessments ordinarily proceed by paying the tax then suing for a refund; as part of a
refund suit, taxpayers can challenge the validity of relevant tax regulations. 101
In contrast, a taxpayer seeking to challenge a tax regulation via a declaratory relief
claim under section 11350 may face obstacles. If the taxpayer has outstanding tax
liabilities, a section 11350 claim may be barred by the “pay first, litigate second” rule,
which ordinarily requires a taxpayer to pay a disputed tax before seeking judicial
review. 102 Even after the tax is paid, a section 11350 claim may still be barred under the
Stoneham v. Rushen (1984) 156 Cal.App.3d 302, 310; see also Code Civ. Proc., § 1062
(“The remedies provided by this chapter [authorizing declaratory relief] are cumulative,
and shall not be construed as restricting any remedy, provisional or otherwise, provided
by law for the benefit of any party to such action”).
98

See Gov. Code, § 11350 (declaratory judgment); Code Civ. Proc., § 1085 (ordinary
mandamus); Woods v. Superior Ct., supra, 28 Cal.3d at p. 682; see also Asimow et al.,
Cal. Practice Guide: Administrative Law, supra, ¶ 13:3 (regulations can “be reviewed by
traditional mandamus, which appears to be interchangeable with declaratory relief”).
99

See Woods v. Superior Ct., supra, 28 Cal.3d at p. 682. Administrative mandamus is
generally available to challenge “any final administrative order or decision made as the
result of a proceeding in which by law a hearing is required to be given, evidence is
required to be taken, and discretion in the determination of facts is vested in the inferior
tribunal, corporation, board, or officer.” (Code Civ. Proc., § 1094.5, subd. (a).)
100

See California Dep’t of Tax & Fee Admin. v. Superior Ct., supra, 48 Cal.App.5th at
p. 934 (“[T]axpayers with outstanding tax assessments . . . have an administrative and
judicial forum for testing the validity of tax regulations through the tax refund
procedures”); e.g., Oliver & Williams Elevator Corp. v. State Bd. of Equalization (1975)
48 Cal.App.3d 890 (determining validity of tax regulation in refund suit).
101

See California Dep’t of Tax & Fee Admin. v. Superior Ct., supra, 48 Cal.App.5th at
pp. 930, 933 (where taxpayer had not yet paid disputed tax, section 11350(a) claim to
challenge validity of tax regulation was barred by Cal. Const., art. XIII, § 32); see also
Woosley v. State of California (1992) 3 Cal.4th 758, 785, fn. 20 (“Government Code
section 11350 . . . is strictly construed in tax cases and may not be used to prevent the
state from collecting taxes”).
102

16

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rule that declaratory relief is sometimes unavailable where there is an adequate
alternative remedy—here, challenging the regulation through a refund suit. 103 And even
where a section 11350 claim is available, section 11350(d) typically limits the record on
judicial review to the materials before the agency during the rulemaking. 104 Given these
constraints, we do not believe the Legislature intended section 11350 to be the sole
means to challenge regulations in this context. And we do not see how an OTA panel’s
adjudication of such challenges would undercut the APA’s declaratory relief mechanism.
The California Constitution Does Not Bar OTA Panels from Adjudicating
Challenges to Tax Regulations.
The requestor also argues that if OTA panels hear challenges to regulations, it
would violate the California Constitution. The Legislative Counsel raised similar
concerns as to Board appeals. 105 We see no constitutional problems.
Article III, section 3.5 does not bar OTA panels from deciding whether tax
regulations are inconsistent with governing statutes.
In Southern Pacific Transportation Co. v. Public Utilities Commission, the
California Supreme Court held that in an administrative adjudication “the Public Utilities
Commission had the power to declare a state statute unconstitutional.” 106 In response, the
voters enacted Article III, section 3.5 of the California Constitution. It provides that an
“administrative agency . . . has no power” to “declare a statute unenforceable, or refuse to
enforce a statute, on the basis of it being unconstitutional unless an appellate court has
made a determination that such statute is unconstitutional.” 107 Section 3.5 similarly bars
an agency from “refus[ing] to enforce a statute on the basis that federal law or federal
regulations prohibit the [statute’s] enforcement,” unless applying an appellate court’s
See Honeywell, Inc. v. State Bd. of Equalization (1975) 48 Cal.App.3d 907, 914, citing
Code Civ. Proc., § 1061; Flying Dutchman Park, Inc. v. City & Cnty. of San Francisco
(2001) 93 Cal.App.4th 1129, 1138-1139 (declaratory relief unavailable given alternative
of local tax refund procedure); see also K. & W. Pharmacy, Inc. v. State Dep’t of Soc.
Welfare (1969) 275 Cal.App.2d 139, 140-142.
103

Gov. Code, § 11350, subd. (d); see Asimow et al., Cal. Practice Guide: Administrative
Law, supra, ¶ 20:20 (“When a rule adopted under the APA is challenged in court by an
action for declaratory judgment, the rulemaking file becomes the rulemaking record on
judicial review. . . . [N]o additional materials can be admitted,” citation omitted).
104

See In the Matter of the Appeal of: Safeway, Inc., supra, 2005 WL 3530181, at p. *3
& fn. 3 (describing 2003 Legislative Counsel opinion and disagreeing with its analysis).
105

Reese v. Kizer (1988) 46 Cal.3d 996, 1002; see S. Pac. Transportation Co. v. Pub.
Utilities Com. (1976) 18 Cal.3d 308.
106

107

Cal. Const., art. III, § 3.5, subd. (a); see also id., subd. (b).
17

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determination. 108 In light of section 3.5, it is clear that OTA panels (like the Board before
them) cannot “declare a [tax] statute unconstitutional” and “refuse to enforce” it on that
basis. 109
But section 3.5 does not affect our conclusion here. Although the provision limits
an agency’s ability to refuse to enforce a “statute,” it says nothing about an agency’s
power to decline to enforce a regulation. Both the California Supreme Court and the
Court of Appeal have therefore indicated that section 3.5 does not limit an agency’s
authority to determine that a regulation is invalid in particular circumstances. 110 Nor
would such a reading appear to further the provision’s purpose, which is “to prevent
agencies from using their own interpretation” of applicable law “to thwart the mandates
of the Legislature.” 111
In any event, section 3.5 would at most restrict OTA’s authority to hear challenges
to regulations in limited circumstances. As the Court of Appeal explained in Burlington
Northern and Santa Fe Railway Co. v. Public Utilities Commission, section 3.5 “only
restricts [an agency’s] use of two sources as justification for refusing to enforce a statute:
the constitution and federal law.” 112 As a result, section 3.5 does not bar an
administrative agency “from refusing to enforce a statute because it is inconsistent with
another statute.” 113 If an agency can decline to apply a statute as inconsistent with
another statute, then it can surely decline to apply a regulation on the same basis.
There are no separation-of-powers concerns here.
We likewise conclude that authorizing OTA panels to adjudicate challenges to
regulations would not violate the separation of powers. We first consider the requestor’s
arguments that OTA panels sit in a different position than the Board for separation-ofpowers purposes. We then turn to the merits of the constitutional analysis.
108

Cal. Const., art. III, § 3.5, subd. (c).

Cal. Const., art. III, § 3.5, subds. (a), (b); see, e.g., 76 Ops.Cal.Atty.Gen. 98, 101-102
(1993) (under section 3.5, the Board must enforce a statute even if it concludes the statute
is unconstitutional); 64 Ops.Cal.Atty.Gen. 156, 162-164 (1981) (same).
109

See Goldin v. Pub. Utilities Comm’n (1979) 23 Cal.3d 638, 669, fn. 18 (section 3.5
“places certain restrictions on administrative agencies relative to their refusal to enforce
statutes . . . . It does not affect their enforcement of their own rules”); Lewis-Westco &
Co. v. Alcoholic Bev. Control Appeals Bd. (1982) 136 Cal.App.3d 829, 840, fn. 12.
110

Reese v. Kizer, supra, 46 Cal.3d at p. 1002, italics added; see also Lockyer v. City &
Cnty. of San Francisco (2004) 33 Cal.4th 1055, 1083-1084 (similar).
111

112

Burlington N. & Santa Fe Ry. Co. v. PUC, supra, 112 Cal.App.4th at p. 887.

113

Id. at pp. 887-888.
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Constitutional Status of the Board and OTA
At the outset, the requestor argues that, for two reasons, OTA panels have more
limited adjudicative authority than the Board did. We do not agree.
First, the requestor notes that the Board was created by the state Constitution,
whereas OTA was created by the Legislature. That distinction can be significant. Under
the “Constitution, the Legislature may not ordinarily confer judicial functions upon any
statewide administrative agency which the Legislature has created.” 114 Such agencies
cannot exercise judicial power in the constitutional sense (though they may still exercise
broad adjudicative authority, as explained below). 115 But “where the Constitution itself
has authorized the creation of an agency and has also authorized the Legislature to vest
judicial powers in that agency, the picture is different.” 116 Such an agency can be
delegated judicial authority within the scope of the constitutional authorization. 117 The
Public Utilities Commission is one example. 118
As the requestor observes, OTA cannot exercise judicial authority. But neither
could the Board of Equalization. Although the Constitution created the Board, it did not
authorize the Board to exercise judicial power in the constitutional sense. 119 For this
reason, the Supreme Court has long held that the Legislature cannot confer judicial
authority on the Board in adjudicating taxpayer appeals. 120 The Board thus stood in the
same position as OTA and other executive agencies in the separation-of-powers analysis.

114

Perry Farms, Inc. v. Agric. Lab. Rels. Bd. (1978) 86 Cal.App.3d 448, 460.

See post, fns. 127-150 (concluding that agencies created by the Legislature can
adjudicate challenges to regulations without exercising judicial power in the
constitutional sense).

115

116

Perry Farms, Inc. v. Agric. Lab. Rels. Bd., supra, 86 Cal.App.3d at p. 460.

117

See Lockyer v. City & Cnty. of San Francisco, supra, 33 Cal.4th at pp. 1089-1090.

118

See Perry Farms, Inc. v. Agric. Lab. Rels. Bd., supra, 86 Cal.App.3d at p. 460.

See Cal. Const., art. XIII, §§ 17-19, 28; id., art. XX, § 22; compare Perry Farms, Inc.
v. Agric. Lab. Rels. Bd., supra, 86 Cal.App.3d at p. 460 & fn. 6 (Constitution authorized
Legislature to “confer . . . judicial powers” on agency regulating employee welfare).
119

See Aronoff v. Franchise Tax Bd. (1963) 60 Cal.2d 177, 182 (“no judicial power has
been, or could constitutionally be, conferred upon” the Board), citing Standard Oil Co. v.
State Bd. of Equalization (1936) 6 Cal.2d 557, 565. Although the Board was once
authorized to exercise judicial power as to its former authority over alcohol licensing (see
Covert v. State Bd. of Equalization (1946) 29 Cal.2d 125, 131-132), that authority was
later transferred to a different agency (see Cal. Const., art. XX, § 22, subd. (d)).
120

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Second, the requestor cites Government Code section 15672(b), which states that
OTA “tax appeals panels and the appeals hearings conducted by the tax appeals panels
. . . shall not be construed to be, or to be conducted by, a tax court.” 121 Because OTA is
not a “court,” the requestor argues, its panels lack authority to make “judicial”
determinations concerning a regulation’s validity. But inasmuch as section 15672(b)
reiterates that OTA is not part of the judicial branch and cannot exercise judicial power, it
simply restates a background principle generally applicable to executive agencies—
including both OTA and the Board. In the words of the Supreme Court, “administrative
boards are not courts” and thus cannot “exercis[e] the judicial power of the state” in the
constitutional sense. 122
Moreover, the legislative record suggests that section 15672(b) was not intended
to alter OTA’s adjudicative authority. In an uncodified portion of the legislation, the
Legislature stated that because OTA panels are “administrative bod[ies] and are not part
of the judicial branch, it is the intent of the Legislature for taxpayers to choose by whom
they are represented, . . . as was previously the case” in appeals before the Board.” 123
Consistent with that intent, the Legislature amended a nearby statute to clarify that nonattorneys, such as public accountants, can represent taxpayers in OTA appeals. 124 And it
directed OTA to “adopt regulations regarding the presentation of evidence and
preparation for hearings” that “do not require application of specialized knowledge.” 125
That legislative context clarifies the likely meaning of section 15672(b)’s
statement that OTA is not “a tax court.” By reaffirming that OTA panels “are not part of
the judicial branch,” the provision makes clear that taxpayer appeals cannot be subject to
“court” rules limiting participation to attorneys—such as bar registration requirements, or
specialized evidentiary procedures. 126 Rather, OTA must facilitate taxpayer
representation by non-attorneys, as the Board had done. And because the Legislature’s
objective to allow non-attorneys to practice does not suggest any intent to constrain OTA
panels’ adjudicative authority, we conclude that OTA panels possess the same authority
for these purposes as the Board and other executive agencies generally. As discussed
below, that authority includes the ability to adjudicate statutory challenges to regulations.

121

Gov. Code, § 15672, subd. (b).

McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 361, internal
quotation marks omitted.
122

123

Stats. 2017, ch. 252 (AB 131) § 2, subd. (b); see id., subd. (c).

See Gov. Code, § 15676; see Stats. 2017, ch. 252 (AB 131) § 12 (amending section
15676).
124

125

Gov. Code, § 15679.5, subd. (b)(2).

126

Stats. 2017, ch. 252 (AB 131) § 2, subd. (b).
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Separation-of-Powers Analysis
The California Constitution provides that the “powers of state government are
legislative, executive, and judicial. Persons charged with the exercise of one power may
not exercise either of the others except as permitted by this Constitution.” 127 It further
provides that the “judicial power of this State is vested in” the courts. 128 Here, the
requestor argues that if an OTA panel determines that a tax regulation is inconsistent with
governing statutes, it would exercise the “judicial power” in violation of the Constitution.
We do not share the requestor’s concerns. As a general rule, the “separation of
powers doctrine is violated only when the actions of a branch of government defeat or
materially impair the inherent functions of another branch.” 129 Here, we see no reason
why allowing OTA panels to consider the validity of tax regulations would impair the
judiciary’s functions. To the contrary, as Woods explained, it is helpful to the judiciary
when an agency evaluates the validity of regulations in an administrative appeal. Such
administrative review avoids “burden[ing] [courts] with matters which can be adequately
resolved in administrative fori.” 130 And even if judicial review is necessary, “the task of
a reviewing court is simplified by a narrowing and clarification of the issues.” 131
To be sure, unlike OTA, the agency hearing the administrative appeal in Woods
also promulgated the challenged regulations. But we see no reason why the Legislature’s
decision to separate agency rulemaking and adjudicative functions into separate agencies
located within the same branch of government should alter the separation-of-powers
analysis, which is primarily concerned with policing the boundary lines between branches
of government. If anything, the Legislature’s decision to divide rulemaking and
adjudicative authority between different executive agencies advances the “primary
purpose” of the separation-of-powers doctrine: “to prevent the combination” of the
“fundamental powers of government” “in the hands of a single person or group.” 132
127

Cal. Const., art. III, § 3.

128

Cal. Const., art. VI, § 1.

Burlington N. & Santa Fe Ry. Co. v. PUC, supra, 112 Cal.App.4th at p. 888, quoting
In re Rosenkrantz (2002) 29 Cal.4th 616, 662; see also In re Att’y Discipline Sys. (1998)
19 Cal.4th 582, 602 (separation-of-powers jurisprudence is “pragmatic” and “does not
command a hermetic sealing off of the three branches of Government from one another,”
internal quotation marks omitted).
129

130

Woods v. Superior Ct., supra, 28 Cal.3d at p. 680.

Id. at p. 681; see Loeffler v. Target Corp., supra, 58 Cal.4th at p. 1127 (noting benefits
of administrative adjudication of tax claims).
131

Davis v. Mun. Ct. (1988) 46 Cal.3d 64, 76; see McHugh v. Santa Monica Rent Control
Bd., supra, 49 Cal.3d at pp. 361-362 (emphasizing the “principle of check”).
132

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Burlington Northern is again instructive. There, the Court of Appeal held that the
Public Utilities Commission could decline to enforce a statute based on the agency’s
conclusion that it conflicted with another statute. 133 In rejecting a separation-of-powers
challenge, the court reasoned that the agency’s decision would not “defeat” or “impair”
the judicial function. 134 The agency was “in a favorable position to decide whether two
statutes it is empowered and commanded to enforce can be consistently enforced.” 135
Similar reasoning applies here.
The requestor observes that, by analyzing a regulation’s validity, an OTA panel
would conduct the same type of analysis performed by courts. But the same is true of all
OTA panel functions: finding facts, determining the law, and applying the law to the
facts. Yet these types of “legislative delegations of adjudicatory power” to executive
agencies are now “routinely accepted.” 136 Moreover, while the judiciary may have the
final say as to a regulation’s validity, that too is true of all OTA decisions. OTA panels
interpret statutes and regulations, for instance, yet final authority over those issues “rests
with the courts.” 137 Accordingly, the fact that a court may ultimately determine a tax
regulation’s validity does not mean that OTA panels cannot consider the issue at the
administrative stage; indeed, under exhaustion rules, taxpayers ordinarily must raise
claims at the administrative stage to preserve them for judicial review. 138
Finally, the circumstances here are distinguishable from cases where executive
agencies exceeded constitutional bounds. First, the California Supreme Court has held
that an agency would exercise “judicial power” by determining that the “basic statute
under which it operates” is unconstitutional—an extraordinary question as to which the

133

Burlington N. & Santa Fe Ry. Co. v. PUC, supra, 112 Cal.App.4th at pp. 888-889.

134

Ibid.

Id. at p. 889. As discussed above, the Public Utilities Commission is authorized to
exercise judicial power in some circumstances. But the court’s separation-of-powers
analysis did not rely on that fact. (See id. at pp. 888-889.)
135

Asimow et al., Cal. Practice Guide: Administrative Law, supra, ¶ 2:125; see McHugh
v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at p. 372 (modern decisions
recognize that “agencies do indeed exercise ‘judicial-like’ powers, and accept the need
for [such] powers in our increasingly complex government”).
136

137

Newco Leasing, Inc. v. State Bd. of Equalization, supra, 143 Cal.App.3d at p. 124.

See Loeffler v. Target Corp., supra, 58 Cal.4th at p. 1108, citing Rev. & Tax Code,
§ 6932; see also, e.g., Rev. & Tax Code, §§ 19382, 19385 (authorizing a tax refund suit
against FTB “upon the grounds set forth in [a] claim for refund”); Cal. Code Regs.,
tit. 18, § 30103, subd. (a)(3), (4) (OTA jurisdiction to hear appeal from FTB denial of
refund claim).
138

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agency could not be expected to provide “a dispassionate hearing.” 139 But here, a
challenge to an FTB or CDTFA regulation would not call into question OTA’s own
rulemaking, let alone its “very existence,” so taxpayers can “expect a dispassionate
hearing” on a question within the agency’s ordinary area of expertise. 140 And although
the Supreme Court later explained that an agency exercises judicial power by declaring
that any type of statute is unconstitutional, we are aware of no authority extending that
rule to administrative regulations. 141
Second, agency adjudications can sometimes exceed constitutional limits if there
is inadequate judicial review. 142 That is not an issue here as taxpayers who disagree with
an OTA panel decision can seek de novo review in superior court. 143 As to FTB and
CDTFA, their authority to seek judicial review is unsettled; neither agency has ever
sought to challenge an OTA decision. 144 But we are not aware of any authority holding
that judicial review is required when an adjudicative agency rules in a regulated party’s
favor. 145 Moreover, to the extent FTB and CDTFA lack authority to seek judicial review,
139

State of California v. Superior Ct. (1974) 12 Cal.3d 237, 251.

Ibid.; see Burlington N. & Santa Fe Ry. Co. v. PUC, supra, 112 Cal.App.4th at p. 889
(agency was well “position[ed] to decide whether two statutes it is empowered . . . to
enforce can be consistently enforced, more so than with constitutional law”).
140

Compare Lockyer v. City & Cnty. of San Francisco, supra, 33 Cal.4th at pp. 10921093 (agencies cannot determine constitutional validity of statutes), with Woods v.
Superior Ct., supra, 28 Cal.3d at pp. 680-681 (agency could determine statutory validity
of regulations), Burlington N. & Santa Fe Ry. Co. v. PUC, supra, 112 Cal.App.4th at p.
889 (agency could determine whether statute conflicted with other statute). As described
above, the Board prohibited constitutional challenges to FTB regulations, (see ante, fn.
41 [describing jurisdictional regulations]), but we are aware of no authority requiring that
limitation on separation-of-powers grounds. In any event, the Board’s rules permitted
challenges to FTB regulations on statutory grounds. (See ibid.)
141

142

See McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at pp. 372-373.

143

See Gov. Code, § 15677.

The statute authorizing taxpayer challenges to OTA decisions is silent as to FTB and
CDTFA’s authority to seek judicial review. (See Gov. Code, § 15677.) Whether those
agencies may nonetheless seek judicial review via traditional or administrative
mandamus, the default mechanisms to challenge agency action in the absence of express
statutory authorization (see Code Civ. Proc., §§ 1085, 1094.5; ante, fns. 99-100), or
through other means such as a declaratory-judgment action (see, e.g., Code Civ. Proc.,
§ 1060), is beyond the scope of our analysis.
144

To the contrary, most agency adjudicative decisions are never subject to judicial
review in this scenario: the regulated party has prevailed and thus has no reason to sue,
(continued…)
145

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it would be true as to all OTA decisions, not just those concerning challenges to
regulations. We have no reason to think that all such decisions, including those
performing routine interpretation of the Revenue and Tax Code, pose separation-ofpowers concerns. And FTB’s authority to challenge Board decisions was similarly
unsettled; FTB never attempted to seek judicial review in that context either. Yet we are
aware of no authority calling into question the Board’s decades of decisions, including
those adjudicating challenges to FTB regulations.
Third, an agency violates separation-of-powers principles by adjudicating disputes
that are not “reasonably necessary to effectuate” its “primary, legitimate regulatory
purposes.” 146 For example, the Supreme Court held that a rent control board cannot
adjudicate “a landlord’s common law counterclaims” against a tenant, which would be
“extraneous” to the Board’s purpose of regulating rent levels. 147 Here, in contrast,
adjudicating challenges to tax regulations is reasonably necessary to effectuate OTA’s
regulatory purpose: to provide “a fair and efficient appeals process.” 148 Allowing such
challenges “avoid[s] delay and unnecessary expense in vindication of legal rights,” while
promoting “the efficient use of governmental resources.” 149 An OTA panel’s
adjudication of such claims therefore raises no separation-of-powers concerns. 150
CONCLUSION
When adjudicating a taxpayer appeal, an OTA panel can evaluate whether
applying a particular tax regulation to that taxpayer’s circumstances would conflict with
governing statutes. If so, the panel can decline to apply the regulation in determining the
taxpayer’s liability.
while the agency typically cannot sue itself to challenge its own decisions. (See, e.g.,
Harris Transportation Co. v. Air Res. Bd., supra, 32 Cal.App.4th at pp. 1476-1479 [Air
Resources Board could declare its own regulations invalid in administrative appeal, even
though there would typically be no possibility of judicial review of that determination].)
146

McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at p. 372, italics omitted.

Id. at pp. 374-375; see also Walnut Creek Manor v. Fair Emp. & Hous. Com. (1991)
54 Cal.3d 245, 265 (agency could not award emotional distress damages in housing
discrimination case).
147

148

Stats. 2017, ch. 16 (AB 102) § 2, subd. (b); id., subd. (a).

149

Woods v. Superior Ct., supra, 28 Cal.3d at pp. 680-681.

See also, e.g., McHugh v. Santa Monica Rent Control Bd., supra, 49 Cal.3d at p. 375
(agency could determine excessive rents charged by landlord to advance purpose of
regulating rent levels); Bradshaw v. Park (1994) 29 Cal.App.4th 1267, 1275-1277
(agency could adjudicate monetary penalties against employers who failed to secure
workers’ compensation insurance to advance purpose of funding injured workers).
150

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