CBA reports bill to governor, approves committee appointments and rulemaking to implement AB 1175; accepts year-end finances

The California Board of Accountancy on Sept. 19–20 received a legislative update that its sponsored measure, Assembly Bill 1175, passed the Senate and was presented to the governor, and the board approved committee reappointments and a retirement resolution while directing staff to begin regulatory work tied to the bill’s implementation if it is enacted.

The legislative update came from David Hemphill, the board’s information and planning officer, who told members that AB 1175 passed the Senate unanimously and was presented to the governor on Sept. 9; the governor has 30 days from presentation—until Oct. 9—to act. The board’s Committee on Professional Conduct (CPC) recommended a regulatory package tied to AB 1175, and the full board voted to adopt the CPC motion, which includes a contingency clause that the rulemaking proceed if AB 1175 becomes law.

Why it matters: AB 1175 will require regulatory changes at the CBA if signed. The board’s approval to begin a contingent rulemaking means staff can prepare regulatory language, forms and timelines so the agency can move promptly if the governor signs the bill.

Key actions and votes

- Retirement: The board accepted the retirement of Michael Williams, CPA. The motion to accept the retirement was moved from the floor and seconded; roll-call responses recorded unanimous approval and the chair announced “Motion carries.”

- Appointments: The board reappointed Jeffrey Delizer, CPA, to the Enforcement Advisory Committee through Sept. 30, 2027. The board also approved reappointments and one appointment to the Peer Review Oversight Committee: reappointments of Jeffrey Delizer, CPA; Fausto Hinojosa, CPA; Nick Peterson, CPA; and the appointment of Vikram Deshpande, CPA. Those appointment motions were called and carried by roll call.

- Rulemaking tied to AB 1175: The CPC recommended and the board approved initiating a rulemaking package to implement AB 1175, subject to the bill’s enactment. The motion directs staff to prepare proposed regulatory text and associated forms for publication and further public comment.

What the board heard besides legislation and votes

- Executive officer evaluation process: Olivia Trejo of the Department of Consumer Affairs (DCA) Office of Human Resources presented the process the board will follow for the annual evaluation of the CBA executive officer at the November meeting. Trejo said members will receive detailed instructions about completing an appraisal form that contains four performance factors and subfactors; DCA executive leader commentary will be shared only in closed session at the November meeting; the board president consolidates members’ input and meets individually with the executive officer to review the final appraisal; and the signed appraisal will be placed in the executive officer’s personnel file.

- Legislation and policy updates: Hemphill also briefed the board on other bills affecting the CBA: AB 1405 (AI auditors/enrollment) was held in the Senate Appropriations Committee and is not moving this year; several education oversight bills were discussed with mixed outcomes (some failed deadlines, others advanced to the governor). Hemphill thanked CalCPA and board members for support during the bill process.

- Department of Consumer Affairs update: Julianne Allen, a legislative analyst in DCA’s Division of Legislative Affairs, summarized department-wide items. She noted a Gov. Newsom executive order changing hybrid telework guidance, the Department of Finance travel restrictions limiting out-of-state travel to mission-critical activities (with an eight-week notice to DCA budget), and the publication of DCA’s annual report on the department website.

- FY 2024–25 year-end financials: The board received the secretary-treasurer’s report for the fiscal year that closed June 30, 2025. Highlights presented to the board: - Adopted budget: $19,785,000 - Total revenue: $21,860,000 (about a 15% increase over 2023–24) - Largest revenue source: license renewal fees (over $15,300,000) - Expenditures: 89.6% of budget used; the CBA reported a surplus of roughly $2,100,000 (about a 10.4% surplus) - Fund condition: 13.4 months in reserve at fiscal year close - Enforcement expenditures rose to $779,314 (a reported 15.9% increase, with much of the cost allocated to work by the Attorney General’s office) - The board was reminded that a fee increase that took effect July 1, 2024, contributed to the revenue increase and that a second phase of the fee increase is scheduled for July 1, 2026.

Board members asked several budget questions during the report: whether exceeding a line-item budget has consequences (staff said line-item variances are common so long as total expenditures stay within annual budget authority), how reserves are used or accessed, and why out-of-state travel is not separately budgeted (staff said it is typically paid from the general travel allocation and varies by year).

- Committee on Professional Conduct (CPC) report: Board members received a multi-part CPC report. The CPC focused on modernizing continuing education (CE) requirements, including provider standards and safeguards related to artificial intelligence (AI) use in course development. The CPC’s policy directions recommended, among other items: clearer learning objectives from providers; conflict-of-interest disclosures; technology-failure policies; retention of documentation of how CE credit is determined; issuing certificates within 60 days of completion; permitting through-course tests; and requiring a human instructor for synchronous courses. The CPC recommended the CBA adopt staff’s proposed policy directions for inclusion in a future rulemaking package; the full board voted to carry that recommendation forward.

CalCPA representative Jason Fox told the board that CalCPA supports the CBA’s participation in the national discussion on CE and emphasized the importance of competency and quality in CE offerings.

- Alternative practice structures and private equity: The CPC also discussed alternative practice structures, private equity involvement in CPA firms and related oversight concerns (independence, governance, consumer transparency, cross-border practice). The board acknowledged the executive officer’s participation in NASBA’s task force on private equity and asked staff to identify subject-matter leaders who could brief the board on practical scenarios.

Public comment and next steps

Public comment periods for multiple agenda groups were opened and closed with no substantive public comments recorded for the items summarized here. The board asked staff to publish further details for board member actions that require submissions (for example, statements of qualification for leadership positions due Oct. 10, 2025) and to circulate detailed instructions for the executive officer evaluation about one month prior to the November meeting. Staff will proceed with the contingent rulemaking drafting and prepare materials for public notice if AB 1175 is enacted.

Ending note: The board’s votes on retirements and committee appointments were unanimous as recorded during roll call; the board also reaffirmed its desire to be engaged in national conversations on emerging issues including CE modernization and private equity in accounting firms.