Poring Over More Than 2,500 Legislative Proposals

As spring sets in and we wrap up the first third of the calendar , it is a good time to check in on CalCPA ’ s advocacy work .

Navigating 2,600 + Legislative Proposals Legislators introduced more than 2,600 pieces of legislation by the February deadline for bill introductions . While it ’ s normal to see a large number of introductions in the first year of a two-year session , this was more than most insiders had anticipated . Most had expected that a down budget and a large group of new legislators would be more judicious with their proposals . CalCPA filtered through these proposals and outlined some of the items we are tracking .

On the business front , AB 39 ( Grayson ) would create a regulatory framework , including audit requirements , for digital financial asset businesses . A reintroduction of environmental , social and governance ( ESG ) related proposals , SB 253 ( Wiener ) would create the Climate Corporate Data Accountability Act to require reporting of scope 1 , 2 & 3 greenhouse gas emissions for certain corporations doing business in California . The reporting would require assurances auditing provisions . SB 261 ( Stern ) would require certain businesses to prepare a report disclosing its climate-related financial risk and measures adopted to reduce and adapt to disclosed risks . Artificial intelligence is also a focus of proposals . AB 331 ( Bauer-Kahan ) would add requirements and require an impact assessment for the developer and deployer of automated decision tools used in consequential decisions , including employment and financial services . Employment issues , particularly AB 1076 ( Bauer-Kahan ), which would limit the use of noncompete contracts is another area we are following .

On the tax front , we saw the reintroduction of a California wealth tax on worldwide net worth of high-income individuals in AB 259 ( Lee ) and the corresponding ACA 3 ( Lee ). While this has gotten a lot of attention in the media , the political realities of these proposals are slim — particularly since Gov . Newsom has already come out in opposition to them .

We also are following ACA 11 ( Ting ), a proposal to abolish the Board of Equalization ( BOE ). While much of the BOE ’ s statutory duties were moved to the Office of Tax Appeals and the California Dept . of Tax and Fee Administration in 2017 , the remaining constitutional authorities stayed with the BOE . This proposal would put before the voters an initiative to reassign the remaining BOE responsibilities to a new or existing state tax agency .

Several proposals have been introduced to exempt forgiven student loans from state tax . These are largely on hold while the federal student loan forgiveness program is tied up in the courts , but should the federal forgiveness program move forward , California intends to address the state tax treatment of the forgiven loans .

CalCPA also continues to be active on various tax advocacy efforts , including those to add flexibility and refinement to the pass-through entity tax ( PTET ) provisions . We are particularly looking at how to add flexibility to the current June 15 deadline for PTET payments . While legislation has not been introduced , CalCPA is having ongoing conversations with policy leaders to explore a path forward on this critical issue .

CalCPA ’ s government relations team will be offering quarterly advocacy updates on these and other advocacy issues . Please keep an eye out for the next upcoming webinar and sign up for this free member benefit .

Pipeline Advocacy Earlier this year , the AICPA developed and released a draft plan that outlines a set of actions intended to accelerate solutions and address certain root causes of pipeline issues impacting future CPA talent . The plan outlined a number of initiatives highlighted by a proposal that would add flexible ways to meet current education and experience requirements by creating a hybrid program that assists a candidate in meeting both requirements concurrently .

The plan also proposed extending the current testing window beyond the 18 months to allow candidates to have more time to pass all sections of the CPA Exam .

Other areas looked at how the profession can change the perception of the CPAs by reframing how the profession is talked about and long-held profession practices can evolve to better support new and future talent entering the profession .

CalCPA provided detailed feedback to the AICPA that centered on the need to focus on the most impactful initiatives . CalCPA emphasized the importance of prioritizing efforts to reshape the perceptions and opinions of the profession . This included support for a profession-lead effort to commit to changes that would substantiate a rebranded profession . Additionally , CalCPA suggested extending the 18-month testing window to 36 months and further exploring flexible education models .

Another comment is the need for datadriven decisions and using quantitative data to inform and support the most impactful efforts . CalCPA also called for an analysis of the educational framework to reimagine and realign behind an approach that would prepare future accountants for the evolving landscape of the profession . Overall , CalCPA ’ s feedback highlights the need for a coordinated effort to tackle this challenge . As the conversations continue , keep an eye out for opportunities to learn more about how CalCPA is working to improve the CPA pipeline and ways you can support those efforts .

Jason Fox is CalCPA ’ s vice president of government relations . You can reach him at jason . fox @ calcpa . org .

www . calcpa . org MAY 2023 CALIFORNIA CPA 21