BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1712


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          ASSEMBLY THIRD READING


          AB  
          1712 (Obernolte)


          As Amended  May 27, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Human Services  |6-0  |Bonilla, Calderon,    |                    |
          |                |     |Lopez, Maienschein,   |                    |
          |                |     |Mark Stone, Thurmond  |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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                                                                    AB 1712


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          SUMMARY:  Authorizes child care contractors to use electronic  
          signatures and permits the Superintendent of Public Instruction  
          to adopt superseding rules and regulations regarding electronic  
          signatures used by child care contractors and alternative  
          payment programs (APPs) and providers.


          Specifically, this bill:


          1)Authorizes child care contractors to use electronic signatures  
            and requires that those signatures have the same force and  
            effect as manual signatures.


          2)Authorizes the State Superintendent of Public Instruction to  
            adopt rules and regulations related to digital signatures and  
            further grants precedence to these rules and regulations  
            should they differ from existing law, as specified.


          EXISTING LAW:  


          1)Establishes the California Child Care and Development Services  
            Act to provide a comprehensive, community-based, coordinated,  
            and cost-effective system of child care and development  
            services for children from birth to age 13 with the purpose of  
            enhancing the social, emotional, physical, and intellectual  
            development of children.  (Education Code Section (EDC) 8200  
            et seq.)


          2)Defines child care and development services as services  
            designed to meet a wide variety of needs of children and their  
            families, while their parents or guardians are working, in  
            training, seeking employment, incapacitated, or in need of  
            respite.  (EDC 8208(j)) 









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          3)Authorizes local government agencies or non-profit  
            organizations to contract with the California Department of  
            Education (CDE) to operate Alternative Payment Programs (APPs)  
            and provide alternative payments and support services to  
            parents and child development providers.  (EDC 8220 et seq.) 


          4)Establishes requirements and procedures APPs and child  
            development providers must follow as contracted agencies with  
            CDE, including, but not limited to, tracking and reporting of  
            attendance, accounting and auditing requirements, and  
            reimbursement and payment procedures.  (EDC 8221.5) 


          5)Permits APPs and child care providers and child care  
            contractors to maintain records in electronic format, as  
            specified.  (EDC 8227.3, 8262.1) 


          6)Permits APPs and child care providers to use electronic  
            signatures, as specified.  (EDC 8227.5)


          7)Establishes the Uniform Electronic Transactions Act (UETA),  
            which permits, but does not require, a record or signature to  
            be created, generated, sent, communicated, received, stored,  
            or otherwise processed or used by electronic means or in  
            electronic form.  (CIV 1633.1 et seq.)


          8)Establishes that a digital signature, when used in written  
            communication with a public entity, shall have the same force  
            and effect of a manual signature if it meets certain  
            requirements, as specified.  (GOV 16.5)


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill may result in the following costs, as  








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          anticipated by CDE:


          1)One-time costs of $73,000 to train audit staff, update related  
            guides and procedures.  (Federal funds and General Fund).


          2)Unknown additional costs for audit fieldwork to verify systems  
            meet required standards, with costs expected to decrease over  
            time.  Potential costs could be between the low tens of  
            thousands to the low hundreds of thousands.  Costs will  
            largely depend on the duration and complexity of each audit.   
            (Federal funds and General Fund)


          COMMENTS:


          Subsidized child care programs:  In California, subsidized child  
          care may be available to families that meet certain eligibility  
          requirements.  The three main types of subsidized child care  
          programs include:  California Work Opportunity and  
          Responsibility to Kids (CalWORKS) child care, Alternative  
          Payment Programs (APPs) and General Child Care.  General Child  
          Care offers child care and education/development services  
          through contracted child care centers and family child care home  
          networks that are administered through public or private  
          agencies, while child care administered by CalWORKs and APPs is  
          offered through a voucher system.  For 2015-16, the Legislative  
          Analyst's Office estimates that there are close to 131,000  
          CalWORKs child care slots; 33,000 APP slots; and 29,000 General  
          Child Care slots.


          Digital signatures:  California Government Code Section 16.5  
          defines "digital signature" as an electronic identifier, created  
          by computer, intended by the party using it to have the same  
          force and effect as the use of a manual signature if and only if  
          it:  is unique to the person using it; is capable of  








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          verification; is under the sole control of the person using it;  
          is linked to data in such a manner that if the data are changed,  
          the digital signature is invalidated; and conforms to  
          regulations adopted by the Secretary of State.  This section  
          also states that the use or acceptance of a digital signature  
          shall be at the option of the parties.  According to the  
          California Secretary of State, digital signatures can be used  
          for many transactions that currently require a handwritten  
          signature, such as on-line college applications and submitting  
          applications for business permits at the local level.


          Need for this bill:  According to the author, "California leads  
          the nation when it comes to innovation and technology.  However,  
          many of our state government operations have been left in the  
          past.  As a result, a number of state agencies are forced to  
          operate in a manner that is both outdated and inefficient.   
          [This bill] would help modernize one of these out-of-date  
          conventions and correct an oversight in existing law by allowing  
          childcare center contractors to use electronic signatures.   
          Providing child care centers with this option will greatly  
          increase their efficiency and maximize the use of their  
          resources." 


          PRIOR LEGISLATION:


          AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the  
          authority of APPs and child care providers and child care  
          contractors to use electronic methods for storage of documents  
          or records, and permitted APPs to use digital signatures  
          pursuant to current state standards. 




          Analysis Prepared by:                                             
                          Kelsy Castillo / HUM. S. / (916) 319-2089  FN:  








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