Under the provisions of Assembly Bill 433, taxpayer appeals can still be held in closed session when proprietary information is being discussed, but not for the entire hearing.

The proposed regulation defines such proprietary information as a taxpayer's bank records, financial statements, customer lists, vendor lists and trade secrets.

But language in the regulation also allows appeals to be closed during a discussion of "... other information which, if disclosed, would put the taxpayer's business at a competitive disadvantage."

Smith said the language goes beyond the scope of the legislation and gives the commission too much leeway to close a hearing.

"I don't believe that language is in the law, and I think it greatly expands on the language that was in AB433," Smith said.

The Taxation Department took testimony on the proposed regulation during an hour-long public hearing.

The Legislature modified the open meeting law rules that the Tax Commission must follow after a dispute arose between the state attorney general's office and the panel over the use of closed-door sessions for taxpayer appeals.

The legislation is intended to allow for closed sessions when necessary to protect confidential taxpayer information. The taxpayer would have to request a closed hearing and the commission would have to evaluate whether some information being submitted should be protected.

The case that provoked the Legislature to act involved an appeal by Southern California Edison Co. involving the operation of its now-closed Mohave Generating Station near Laughlin.

The utility won a $40 million refund from the Tax Commission in May 2005 after a three-year administrative hearing.

Then-Attorney General George Chanos argued the commission should have taken action on the refund in a public meeting.

The commission argued that a separate state law required it to vote behind closed doors to protect the confidentiality of the taxpayer information.

A Carson City district judge ruled for the Tax Commission.

The Nevada Supreme Court is scheduled to hear an appeal of that decision on Monday.